Ackman Scores Big on Longs Drug Stores

Bill Ackman just scored a major win with Longs Drug Stores (LDG) last night. CVS (CVS) announced that it would acquire the drug store chain for $71.50 per share, a significant premium to the $54.04 close.

On August 5th, Ackman's Pershing Square disclosed an 8.8% stake (3,137,659 shares) in the company. Ackman also has 5,296,896 notional shares underlying certain cash-settled total return swaps, bringing his total economic exposure to 8,434,555 shares of Common Stock (approximately 23.6% of the outstanding shares of Common Stock).

Ackman paid $136,609,962 for these positions. The total value of the shares Ackman controls, at the buyout price of $71.50, is worth $603,070,682.

As Ackman just started accumulating shares in late June and July in the $40 range, this is an amazing windfall for Ackman and may go down as one of the 'best trades ever.'

Bill Ackman's Pershing Square hedge fund is a long/short equity fund with an activist bent. Ackman holds large positions in Target (TGT) and Borders (BGP), among others. Ackman proved his acumen as a short seller in 2007/2008 as short positions he held in MBIA (MBI) and Ambac (ABK) proved to be big winners due to the credit crunch.

Comments

[apppro:]

Just makes me want to vomit. FD: I own CVS & ABK. (Jealous?)
I wonder what that jerk will do now - invest in CVS? Doubtful. Something smells very fishy here!

2008 Aug 13 07:23 AM

[apppro:]

And if your info is correct, and I am assuming it is,

"As Ackman just started accumulating shares in late June and July in the $40 range, this is an amazing windfall for Ackman and may go down as one of the 'best trades ever.'"

then Ackman was amassing this overly quick future fortune just when CVS was hitting a new high at around $44+ and THEN quickly DRIFTING back to $37ish.

Yeah, SOMETHING DOES SMELL VERY FISHY HERE!!!

2008 Aug 13 07:35 AM

[User 220330:]

This reeks of insider trading. I will be shocked if the SEC doesn't investigate.

2008 Aug 13 01:59 PM

[marcopolode...:]

walgreens is buying RITE AID

2008 Aug 13 07:25 PM