Walgreens Stock Jumps On Report Of Potential Private-Equity Sale: What You Need To Know

Walgreens Boots Alliance Inc WBA shares are trading higher Tuesday afternoon following a report suggesting the company is in talks to be acquired by a private-equity firm.

What To Know: According to a Wall Street Journal report, Walgreens has been discussing a deal with Sycamore Partners in which Walgreens would sell itself to the private-equity firm and pull the pharmacy chain from public markets.

Walgreens shares have been trending lower for the last 10 years. The stock was trading above $90 per share and valued at more than $100 billion in 2015. It closed Monday’s session at $8.85 before jumping more than 20% on takeover speculation Tuesday. Walgreens had a market cap of $7.66 billion as of Monday’s close, per Benzinga Pro.

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People familiar with the matter reportedly said Sycamore, who is better known for smaller deals, would likely sell certain parts of the business or bring in partners. The people also said the deal could be completed in early 2025.

The report indicates that one of Sycamore’s latest major deals was when it bought Staples in 2017 for $7 billion. The private equity firm was also among the suitors for Kohl’s in 2022.

Walgreens has reportedly been targeted by private-equity firms for many years. KKR reportedly made close to a $70 billion offer for Walgreens in 2019. The company was valued at more than $50 billion at the time.

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Walgreens reported fourth-quarter financial results in mid-October. Although sales were up about 6% year-over-year, adjusted earnings fell close to 41%, and the company announced plans to close about 1,200 stores over the next three years.

“Fiscal 2025 will be an important rebasing year as we advance our strategy to drive value creation. This turnaround will take time, but we are confident it will yield significant financial and consumer benefits over the long term,” said Tim Wentworth, CEO of Walgreens Boots Alliance.

Walgreens is not due to report quarterly results again until Jan. 9. Analysts expect the company to report adjusted earnings of 38 cents per share on revenue of $37.34 billion, according to estimates from Benzinga Pro.

WBA Price Action: Walgreens shares were up 20.1% at $10.63 at the time of writing on Tuesday, according to Benzinga Pro.

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