--- title: "Walgreens Could Be About to Make a Major Move That Has Investors Thrilled" type: "News" locale: "en" url: "https://longbridge.com/en/news/223182089.md" description: "Walgreens Boots Alliance (WBA) is reportedly in discussions with private equity firm Sycamore Partners for a potential buyout, which could take the company private. This news has caused a slight increase in stock price, but investors remain cautious due to ongoing challenges, including competition from Amazon and Walmart, and pressure from pharmacy benefit managers affecting profit margins. Despite management's efforts to rationalize the business, analysts suggest that a buyout may not yield a significant premium, and caution against investing in Walgreens stock at this time." datetime: "2024-12-24T09:55:36.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/223182089.md) - [en](https://longbridge.com/en/news/223182089.md) - [zh-HK](https://longbridge.com/zh-HK/news/223182089.md) generator: "portal-rs" --- # Walgreens Could Be About to Make a Major Move That Has Investors Thrilled Until recently, many **Walgreens Boots Alliance** (WBA -2.62%) investors were desperately hungry for good news to boost the company's languishing stock price. On Dec. 10 they got some, in the form of a news report detailing a potential buyout deal. That gave the shares a bit of a bump, but overall, investors remain cautious. Should they be so guarded, or is this an opportunity to snap up an underappreciated stock at a serious discount? ## Going private with a private equity player? That Dec. 11 report was published by *The Wall Street Journal*, which wrote that Walgreens management is in discussions with private equity firm Sycamore Partners to take itself private. Typically, a go-private deal prices the company undergoing the transformation at a premium. The financial newspaper implied that there is some urgency to these talks. Citing unidentified "people familiar with the matter," it wrote that the two sides might complete a deal early next year. Neither Walgreens nor Sycamore has yet officially commented on the article. Taking itself off the stock market would eliminate the pressure Walgreens's management surely feels from shareholders, who have seen the value of their holdings wither. Despite the fairly minor price bump from the apparent buyout discussion news, the pharmacy chain operator's stock has largely been a big downer this year. Data by YCharts. Walgreens is currently coping with several challenges to its business and not handling them all that well. It has the problem many other traditional businesses share, in that it's still a heavily brick-and-mortar operator in an environment where the retail apocalypse continues to claim casualties. In March, **Amazon** launched same-day delivery for medications, and several months later, **Walmart** announced it would pilot a similar service. Having one mighty retailer trying to poach your business is a tough situation; having to contend with a potential two exponentially worsens the problem. On top of that, the power of pharmacy benefit managers (PBMs) has negatively affected Walgreens' profit margin. PBMs have quite effectively managed to shave drug prices for both health insurance providers and businesses. ## Don't try to catch this one Walgreens has taken steps to rationalize its business, but these feel like a case of too little, too late. In the summer, management announced plans to shut scores of underperforming stores and to reduce its investment in primary-care company VillageMD. Yet it's not as if these outlets just started to post weak results. The push into the care segment was never particularly well thought out even at the outset. Given the company's apparent zeal to take itself private and the tarnished value of its brand, I'd imagine that even if it does reach a deal with Sycamore, its premium wouldn't be impressively high. It's hard for an eager seller to fetch an attractive price from an opportunistic buyer. For me, this is a falling-knife situation, and I wouldn't hold out hope for a big price pop when a deal is agreed to -- assuming, of course, that one happens at all. I think it's best to leave Walgreens stock well alone. ### Related Stocks - [WBA.US](https://longbridge.com/en/quote/WBA.US.md) - [CAT.US](https://longbridge.com/en/quote/CAT.US.md) - [HAS.US](https://longbridge.com/en/quote/HAS.US.md) - [AMZN.US](https://longbridge.com/en/quote/AMZN.US.md) ## Related News & Research - [Aurobindo Pharma shares in focus on final USFDA approval for Perampanel tablets](https://longbridge.com/en/news/300892798.md) - [Chick-fil-A wants to stay a family business even as it expands in the U.S. and abroad](https://longbridge.com/en/news/300877518.md) - [Rivian’s delayed ALSO e-bikes are finally arriving to first customers, with mixed early feedback](https://longbridge.com/en/news/300877255.md) - [Autonomous Orange: YMX adds Outrider self-driving tech to its electric yard trucks](https://longbridge.com/en/news/300879644.md) - [GoGold Resources Advances Los Ricos South as Parral Funds Mexico Growth](https://longbridge.com/en/news/300874294.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**