Longs' Options Limited After Walgreen's Exit

UBS analyst Neil Currie expects Longs shareholders to accept that offer if it is still there.

"It's been nearly two months since CVS's original bid of $71.50, and yet no additional bidders have come to the table with a higher offer -- save Walgreen," Currie said Wednesday. "With financing and (regulatory) approval in hand, CVS seems to be the most likely winner of Longs."

That doesn't well with Longs shareholders who believe that management rushed into a deal that throws in some -- if not all -- of the company's real estate for free.

Longs operates 521 drugstores in high-priced markets in areas including California and Hawaii. The company controls a number of valuable leases and owns more than 200 drugstores outright. Using vague and admittedly conservative terms, CVS has valued that property at "more than $1 billion."

But outsiders have come up with far higher values. After conducting a detailed analysis, CtW Investment Group concluded that the portfolio is conservatively worth $1.18 billion to $1.25 billion. Others have since presented higher estimates ranging from $1.5 billion to CVS's $2.9 billion offering price.

As a result, some feel other parties could still come forward with a better deal.

"Last we heard, Pershing Square believed they had other investors who were still interested," CtW's Clayton told TheStreet.com on Thursday. Meanwhile, "it's possible that Longs shareholders may still decline CVS's offer because they continue to believe that the company is worth more."

Currie believes that Longs shareholders should accept the deal they already have. If that happens, he sees a victory of sorts for every party involved.