Has Longs Drug Stores Ever Heard of Bill Ackman?

Market Watch Reports:

Longs Drugs said its board won't have negotiations or provide due diligence materials Walgreen was seeking. It also said Walgreen (WAG) has given no assurances the deal will be completed as it gave no timetable. Walgreen on Friday told Longs it was looking to offer $75 a share, subject to additional due diligence. Walgreen said it was "confident" it could secure antitrust approvals and had hired two real estate investment firms to handle potential store sales.

"We are disappointed with the refusal of the Longs board to discuss our superior proposal," Walgreen said in a statement. "We remain committed to pursuing our proposal, which we believe creates superior value for our respective stockholders."

This should be criminal. Longs has nothing to lose in negotiating with Walgreen. The CVS tender offer is a one year deal. That gives Longs one year to find a better offer. In that time it can be sure that Walgreen can complete the deal and run it by the FTC.

Longs has rejected shareholder attempts to look at the company's lease agreements. Now, Ackman's Pershing has an economic interest in 26% of Longs' shares. How can you deny someone who has 26% of the stock a look at the books?

When did the interest of management trump the rights of stockholders as owners? This is as blatant an example as I have seen. One can argue about golden parachutes and their legitimacy all day but to deny a 26% owner a look at the leases of the company he owns, it should be illegal.

At least one thing will come of this. The next letter Ackman fires off to Longs will be a classic. I'll have it for you as soon as I get it.

Disclosure: None

Comments

[notsosmart:]

most bod's & management are self serving.i think the word stockholder is rarely mentioned in corp. headquarters or boardrooms.

2008 Sep 18 12:48 PM