Healthcare and pharmacy company Walgreens Boots Alliance (WBA) is close to sealing a massive $10 billion go-private deal with private equity firm Sycamore Partners, according to a new report from The Wall Street Journal. Sycamore would acquire Walgreens for $11.30 to $11.40 per share in cash, with the deal potentially closing as early as Thursday. Following the news of the possible buyout, WBA stock soared about 5% in the after-hours trading after falling 3.9% during regular trading on Monday.
The proposed buyout could be beneficial for the pharmacy operator, whose market capitalization has fallen from over $100 billion in 2015 to less than $9 billion today. Sycamore is reportedly working with big names like Bank of America (BAC) and JPMorgan (JPM) to secure the necessary funding for this deal.
Sycamore’s Bid May Trigger Walgreens’ Breakup
Sycamore plans to take Walgreens private, removing its shares from public trading and potentially leading to a company breakup.
The Journal reported that Sycamore would retain Walgreens’ core U.S. retail business, which remains a significant part of the company’s revenue. Meanwhile, it is exploring options to sell or take public other WBA’s divisions. These include British pharmacy chain Boots, U.S. healthcare provider VillageMD, U.S. drugstore chain Duane Reade, and beauty brand No7 Beauty Co.
Is WBA Stock a Buy, Sell, or Hold?
The stock of WBA has a consensus Hold rating among eleven Wall Street analysts. That rating is currently based on one Buy, seven Hold, and three Sell recommendations issued in the past three months. The average WBA price target of $11.33 implies 10.43% upside from current levels.
