Longs Sticking to CVS Merger Plan
Longs Drug Stores (LDG) must believe in love at first sight.
In fact, Longs spent just four days considering Walgreen's proposal before brushing the company aside.
"We're extremely skeptical that Longs' board gave Walgreen's offer anything like an appropriate review," says Richard Clayton, research director at CtW Investment Group, an activist organization that provides advisory services to union-backed pension funds. "So we're surprised and disappointed. ... We feel that the independent directors need to do a 'gut check' and decide whose interests they are going to serve."So far, Longs' board - which is chaired by CEO Warren Bryant - has wholeheartedly embraced CVS. Last month, in a deal that promised generous payouts to its top executives, Longs agreed to sell itself to CVS for roughly $2.9 billion, or $71.50 a share. Although the offer carried a sizable premium, it triggered considerable outrage: Because Longs controls a valuable real estate portfolio -- and has, so far, failed to get that portfolio appraised -- its shareholders feel shortchanged. As a result, CVS managed to secure just 4.5% of Longs' stock by the time its tender offer drew to a close. CVS needs to obtain a two-thirds of Longs' stock in order to prevail. This past weekend, however, CVS simply extended the deadline for its offer without actually raising its bid.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV