By overcoming threats of a bidding war, CVS has managed to win control of Longs without raising its original $2.9 billion bid for the company. By Monday morning, CVS had convinced Longs investors to sell 76.5% of their shares at the company's original $71.50 offering price. CVS needed to secure just two-thirds of Longs' stock to seal the deal.
Longs' stock, up 2 cents to $71.47 Monday, reflected the finality of the situation.
"We are very pleased with the strong response to our tender offer," CVS CEO Tom Ryan said on Monday. "Having now satisfied all closing conditions, we look forward to promptly purchasing the tendered shares and completing our merger with Longs."Last month, before the market cratered, CVS faced an uphill battle for the company. Longs shareholders, convinced that their company was worth far more, originally shunned CVS's offer and tendered only a fraction of their shares. Meanwhile, rival Walgreen (WAG) stepped forward with a $75-per-share bid. This month, however, Walgreen had a change of heart. Faced with a plunging stock market, the company decided to keep its $3 billion and let Longs sell itself to CVS instead. To some, the move made sense. "With the stock market revaluation we're witnessing even as we write this, we doubt this will be the last takeover bid launched in headier days that is withdrawn," Gimme credit analyst Carl Levenson wrote on Oct. 9. "CVS might also want to reconsider the premium it is paying for Longs and the value of its real estate, but it's probably gone too far to turn back now."