Longs' Options Limited After Walgreen's Exit

OKLAHOMA CITY -- With Walgreen (WAG Quote) no longer interested in a deal -- and financing scare for other possible bidders -- Longs Drug Stores (LDG Quote) may regret playing hard to get.

As the stock market plunged this week to its lowest level in years, Walgreen decided to keep its $3 billion and let Longs sell itself to CVS-Caremark (CVS Quote) instead. Walgreen had topped CVS's $75-a-share bid by offering $75 a share for the regional drugstore chain.

"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we're witnessing even as we write this, we doubt this will be the last takeover bid launched in headier days that is withdrawn," Gimme Credit analyst Carol Levenson said in a research note Thursday. "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." ...