In Walgreens biggest M&A deal Walgreens sells 83million shares to
Alliance boots for $31 and change to the CEO of Alliance boots.
The CEO of Alliance Boots now becomes the largest single shareholder of Walgreens
Co. and is seated as a board director along with KKR.
Walgreens after making a 4+ billion dollar payment with a bridge loan and issuing 83 million shares of Wag stock is only a 45% stake holder of Alliance Boots and receives 4 positions on its board.
Walgreens has the option but not the obligation to issue more stock and additional payments to Alliance Boot to finalize the buyout should conditions
and revenue projections warrant it..
With Walgreens trading at the current price level it appears the private Equity of Alliance Boots and KKR purchased Walgreens.
As money flow follow performance and Walgreens projected 4 Quarter revenues will fall below expectations, volatility and directional shifts should be expected.
The transfer of risk tolerance usually occurs sooner than later in Mergers /Acquisitions and adds to price Volatility.
Does any anyone care to project a Buyin price???
Milo and Big Yank this is open for discussion.
The salient point is that Walgreens set the Alliance boots deal with a stock price of 31.** without the ESRX contract.
As you and I understand the Stock price of Walgreens would have been 15-20% higher had a ESRX deal been reached
before announcing the A/B merger.
Walgreens at a higher price would have issued less shares....
Hi Rob - I have owned WAG on and off for many years but new to the board. With the recent move up, I have not tried to figure a buy-in price but rather what is the best time/price to short the stock. I saw the multi-step acquisition of Boots as a act of desperation to the continuing decline of customers and revenue in the US. I also think that Walgreens must have conceded in a large part to Express Scripts in the recent agreement. I think this will become obvious as earnings are weighed down from the debt burden, less than expected reimbursement rates from Express Scripts, and a less than expected return of pharmacy customers.
Since any return of customers(or lack there of) will not be reflected in the Sept Qtrly, I will start averaging in to Jan or Feb out of the money Puts. I also may short the stock before Q1 is announced.
<<Hi Rob - I have owned WAG on and off for many years but new to the board.>>
I suspect your sincerity!!!???
<<what is the best time/price to short the stock.>>
Yeh, go ahead and short it today since longs want some fools to pay for their dividend, especially today.
<<I saw the multi-step acquisition of Boots as a act of desperation to the continuing decline of customers and revenue in the US.>>
You could say that if WAG did not make any agreement with ESRX, an old argument before WAG and ESRX put aside their differences.
<<I also think that Walgreens must have conceded in a large part to Express Scripts in the recent agreement.>>
Yeh, those who left behind (Rob) and shorts are saying it to convince themselves.
<<I think this will become obvious as earnings are weighed down...>>
Look at the facts but not imagination. WAG raised its DIVI and most analysts raised WAG revenue and income. These are the facts that WAG will do well.
I sold at 30.50 with a profit and Alliance paid 31.**
That is when I bought KKR which is up from my buyin price.
What did you buy Wag At???
Are you now holding for the next Down turn!!
Would you care to project a hit or miss on 4Q earnings, or is reality not part of your outlook.