This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Show Me (More Than) the Money

Visit our Small Business Center for more tips.

It's great to be popular. If you're a business owner ready to cash out, it's especially gratifying to have two potential suitors in the wings.

But picking the right one isn't always easy.

That's the dilemma facing California-based Longs Drugs. The drugstore chain is currently in the midst of a heated buyout battle between the two biggest industry behemoths: Walgreen (WAG) and CVS Caremark (CVS - Get Report).

What makes Longs (LDG) so alluring? It all goes back to the power of location. Longs Drugs has a strong foothold in Northern California, an area where CVS has few stores. CVS is hoping to expand its pharmacy benefit management services, which coordinate prescription services for employee health-care plans. But they can only do so if employers know their workers will have access to pharmacies throughout the U.S.

Clearly, CVS is a motivated buyer. "In a nutshell, we would view Longs as a nice win for Walgreens, but a must-have for CVS Caremark at this point," wrote analyst Mark Miller of William Blair & Company in a research note.

So why is Walgreen jumping in? Although it has stores throughout California, Walgreens would like to dominate the north as well. The company would also love to expand in Hawaii, where Longs is the dominant pharmacy.

Longs originally pursued a deal with CVS, only to see Walgreen burst in with a higher offer. But promising more per share doesn't necessarily guarantee a win. Longs has turned down the Walgreens offer, citing a number of issues that made the company wary of a potential deal.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CVS $103.21 -0.60%
WAG $81.65 2.05%
AAPL $124.49 -1.50%
FB $82.16 -1.20%
GOOG $548.46 -0.65%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs