Here's the deal and the reason Walgreens needs to look outside for a new CEO. The company planned to have 5 stores open in Hawaii by now. They still have only one. Let's assume that CVS's bid for Longs put things on hold until Walgreens could figure out a response. There-in lays the problem. Longs is the dominant drug store chain in Hawaii. Walgreens could have bought the Hawaii market by making the initial offer for Longs. They didn't. Why not - because the Walgreen culture never believed in growth by acquisition. They wanted all of their locations to be pristine Main and Main sites. So now CVS is going to be their primary competitor in Hawaii and they are a far more imposing operator than Longs. The inability to anticipate that CVS might try to acquire Longs, especially given their history of making large acquisitions, is pathetic. They obviously didn't think there was a realistic chance that CVS would buy Longs or they would have made the first offer instead of reacting to the situation.
Walgreens is one of the best retailers in the country. The stock is clearly under priced. But if they want to regain leadership in the industry they must find a leader that doesn't carry the cultural baggage that will come with any of the current executives.