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  • robbsbeach robbsbeach Jun 22, 2012 2:00 PM Flag

    OT to robb, cmxgen

    Very interesting thought!!

    How about this one, Booth takes Walgreen Rx Distribution into the US Wholesale distribution business, CAH and MCK go after Booths foriegn operations..

    Walgreens left holding the buy-out bag.

    Whats your view of this hitting 32.00 before September???

    I will buy more if Walgreens S/P goes down in the next few weeks.

    This is a trading play, are you In??

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    • robbsbeach,

      I am sure WAG has plans to bring drug wholesaling into the domestic mix; otherwise, there are not enough rationalized savings to consolidate to justify the pricetag for the deal. The PR on the announcement stated $100-150M in projected savings which is really a pittance against the eventual cost pricetag. The value of Boots P/L cosmetics line is nada, in a relative contrast. There are NO other visible cost savings from consolidation since both brands remain, so where does the $16 billion get repaid from? Boots is profitable, but...

      As for WAG S/P, I bought and then later stopped out at $33.18. I thought about buying some when it went below $29. But I did not, and won't trade in it again until there is a change at the top. Either Wasson goes, or the way he is compensated gets aligned with shareholders vs. a cash bonus morass as approved shamelessly by the Board of Marionettes.



      ps. Keep your eye on both CAH and MCK!

      • 1 Reply to big.yank
      • Why did WAG buy 45% stake instead of majority?

        Keep in mind, WAG does not have full control of Boots. I think Boots needed this to help sure up the 11B in debt they have. If you think about it, WAG will pay 16B for the company and the company has 11B in debt. 45% of debt is about 5B that WAG is pretty much on the hook for. Boots MUST expand at the cost of WAG US.

        I don't see WAG getting into US distribution channels here, it would not give them more $ unless they are planning to sell to independents and other retailers.

        WAG has decided their will be NO resolution with ESRX and is preparing for lost MHS business. WAG needs Boots to show EPS growth.

        I dont see CVS buying into this, CVS will buy more PBMs, and drive biz to CVS.

        I thought WAG would provide more clarity on a game plan, but i bet it hasnt been worked out.

        Key challenges ahead, time zone differences, languages, no full control over decision making, personnel not trained to integrate across various regions. Easily a few year process....