Walgreen drops bid for Longs Drug

New York, Oct. 8 - Walgreen Co. pulled its offer to buy Longs Drug Stores Corp.

The Deerfield, Ill., drug store chain said it was abandoning the bid because Longs Drug refused to negotiate - and also noted the worsening economic situation.

"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 chief executive officer Jeffrey A. Rein in a news release. "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."

In a letter to Longs, Rein added that Walgreen continues "to strongly believe" that its offer "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."

Walgreen offered $75.00 per share for Longs, beating the $71.50 from CVS Caremark Corp. that had already been accepted by Longs' board.

CVS Caremark is a Woonsocket, R.I., drugstore chain. Longs is in the same business, based in Walnut Creek, Calif.

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