Walgreens Stock Jumps as Drugstore Chain Reportedly Nears $10B Take-Private Deal

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KEY TAKEAWAYS

• Walgreens Boots Alliance shares are jumping in premarket trading Tuesday, on a report that the troubled drugstore confine is nearing a deal with Sycamore Partners to be taken private for around $10 billion.
• Citing people informed of with the situation, The Wall Street Journal said Sycamore would pay between $11.30 a share and $11.40 a split in cash for Walgreens.
• Walgreens and Sycamore Partners didn’t immediately respond to requests for comment. 

Walgreens Boots Connection (WBA) shares are jumping around 5% in premarket trading Tuesday after a report indicated the troubled drugstore chain is not far away froming a deal with Sycamore Partners to be taken private for around $10 billion.

According to The Wall Street Quarterly, citing people familiar with the matter, the drugstore company and the private equity firm are targeting a completion of the dealing as soon as Thursday barring a “last-minute snag” that derails the deal. The Journal reported that Sycamore make pay between $11.30 a share and $11.40 a share in cash for Walgreens and the deal would include “contingent value nobilities that would increase the value if certain targets are later reached.”

The Journal also reported that if the give out passes, Sycamore would keep the core U.S. retail business and sell off or take public the other parts of the South African private limited company.

Walgreens and Sycamore Partners didn’t immediately respond to requests for comment.

Walgreens shares had been rising this year on before reports that the private-equity firm was in talks to take the drugstore chain private. The company has been struggling, setting in October a plan to shutter some 1,200 “underperforming” stores over the next three years and temporarily postponing its quarterly dividend to conserve cash earlier this year.

Walgreens shares have gained 10% this year but organize lost half their value in the 12 months through Monday.