Walgreen Co. Withdraws Proposal To Acquire Longs Drug Stores Corp.

Main Category: Pharmacy / Pharmacist
Article Date: 09 Oct 2008 - 6:00 PDT

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Walgreens (NYSE:WAG)(NASDAQ:WAG) today withdrew its proposal to acquire all of the outstanding shares of Longs Drug Stores Corp. (NYSE: LDG) for $75 per share in cash. The offer was originally proposed on Sept. 12, 2008, and declined by the board of directors of Longs in favor of the proposed acquisition by CVS/Caremark Corp. (NYSE: CVS) announced on Aug. 12.

"While we believe we made a compelling proposal for Longs, we do not believe it would be in the best interests of Walgreens shareholders, customers or employees to allow this situation to remain unresolved for an extended period of time," said Walgreens Chairman and CEO Jeffrey A. Rein. "Walgreens has a strong balance sheet and robust cash flow. We will continue to focus on strategic initiatives that will maximize value for our shareholders."

Text of the letter sent to the board of directors of Longs follows:
October 8, 2008 Warren F. Bryant Chairman, President and Chief Executive Officer Board of Directors Longs Drug Stores Corporation 141 North Civic Drive Walnut Creek, CA 94596 Dear Mr. Bryant:

We have carefully considered your September 23 response, as well as your prior letter to us and your other public statements.

For all of the reasons articulated in our previous letters, we continue to strongly believe that our proposal to acquire 100% of Longs Drug Stores Corporation at a price of $75 per share was a compelling proposal and in the best interests of your shareholders as well as ours.

However, in light of your repeated refusal to accept our invitation to engage in a constructive dialogue that could lead to a mutually beneficial transaction, and the substantial deterioration in the national economic outlook over the past few weeks, we do not believe it would be in the best interests of the shareholders, customers, or employees of either Walgreens or Longs to allow this situation to remain unresolved for an extended period of time. Accordingly, we have determined to accept the finality of your prior rejections of our September 12 proposal and withdraw our proposal effective immediately.

Sincerely, Jeffrey A. Rein
Chairman and CEO, Walgreen Co.

Walgreens is the USA's largest drugstore chain with fiscal 2008 sales of $59 billion. The company operates 6,479 drugstores in 49 states, the District of Columbia and Puerto Rico. Walgreens provides the most convenient access to consumer goods and cost-effective health care services in America through its retail drugstores, Walgreens Health Services division and Walgreens Health and Wellness division. Walgreens Health Services assists pharmacy patients and prescription drug and medical plans through Walgreens Health Initiatives Inc. (a pharmacy benefit manager), Walgreens Mail Service Inc., Walgreens Home Care Inc., Walgreens Specialty Pharmacy LLC and SeniorMed LLC (a pharmacy provider to long-term care facilities). Walgreens Health and Wellness division includes Take Care Health Systems, which is comprised of: Take Care Consumer Solutions, managers of 247 convenient care clinics at Walgreens drugstores, and Take Care Employer Solutions, managers of worksite-based health and wellness services at 364 employer campuses.

This news release may contain forward-looking statements that involve risks and uncertainties. The following factors could cause results to differ materially from management expectations as projected in such forward-looking statements: seasonal variations, competition, risks of new business areas, the availability and cost of real estate and construction, and changes in federal or state legislation or regulations. Investors are referred to the "Cautionary Note Regarding Forward-Looking Statements" in the Company's most recent Form 10-K, which Note is incorporated into this news release by reference.

Walgreens