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Tim Travis is a veteran deep value investor and money manager. Travis has extensive experience in traditional investments such as stocks and bonds, in addition to having a unique methodology of combining options and distressed investing with value investing to generate income, reduce risk, and... More
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  • Walgreen To Buy 45% Stake In Boots For $6.7 Billion-Bloomberg 0 comments
    Jun 19, 2012 4:05 PM | about stocks: WAG, CVS

    Walgreen (WAG) is acquiring a 45 percent stake in the U.K. drugstore chain Alliance Boots for $6.7 billion.

    The stated purpose of this acquisition is to gain global scale but I don't think the timing is very good. Alliance Boots traded at distressed levels a couple of years back do to a large debt load, and a significant global recession and Walgreen's would have been better trying to take some action back then if this is their strategic

    initiative. I believe that Walgreen's is playing catch up to CVS which has a better scripts business giving them better operating leverage and growth. Walgreen has been a great company for decades but this is a critical time for them to execute. I don't disagree with the overall plan of buying Alliance Boots and eventually taking a controlling stake, but if Walgreen's isn't buying the company outright initially they should have tried to build that majority stake at cheaper prices.

    http://www.bloomberg.com/news/2012-06-19/walgreen-to-acquire-45-alliance-boots-stake-for-6-7-billion.html

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: WAG, CVS
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