WASHINGTON (dpa-AFX) - Walgreens Boots Alliance Inc. (WBA) agreed to be taken private by the private equity firm Sycamore Partners in a transaction valuing the beleaguered drugstore chain at up to $23.7 billion. Total consideration consists of $11.45 per share in cash and additional potential value of Up To $3.00 in cash per WBA share from future monetization of villageMD businesses.
The cash consideration represents a premium of 29%, and the total consideration represents a premium of up to 63%, to the WBA closing share price of $8.85 on December 9, 2024, the day prior to the first media reports regarding a potential transaction.
Upon completion of the transaction, WBA's common stock will no longer be listed on the Nasdaq Stock Market, and WBA will become a private company.
WBA closed Thursday's regular trading at $10.60 down $0.15 or 1.40%. But in the after-hours, the stock gained $0.62 or 5.85%.
Walgreens Boots Alliance said it will continue to operate under Walgreens, Boots and its trusted portfolio of consumer brands. WBA will maintain its headquarters in the Chicago area and continue contributing to the communities in which it operates.
The WBA Board of Directors, with Stefano Pessina and John Lederer recused from the deliberations and approval, has unanimously approved the proposed transaction. The transaction is expected to close in the fourth quarter calendar year 2025.
The transaction agreement provides for a so-called 'go-shop' period, during which WBA, with the assistance of Centerview Partners, its financial advisor, will actively solicit, and depending on interest, potentially receive, evaluate and enter into negotiations with parties that offer alternative proposals. The initial go-shop period is 35 days. There can be no assurance that this process will result in a superior proposal.
As the sole lender to the Divested Assets businesses, WBA expects to receive 100% of the initial net proceeds of any sale or sales of the Divested Assets up to the amount of debt owed to WBA by VillageMD, which as of February 28, 2025, is $3.4 billion, accruing PIK interest at 19% per year.
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