CVS Stands by Offer for Longs Despite Walgreens Bid

Woonsocket, R.I. CVS Caremark Corp. said Sunday it is leaving the price of its $2.7 billion offer for Longs Drug Stores Corp. unchanged, despite it being topped by Walgreen Co., according to the Associated Press.

CVS said it was extending the deadline for its $71.50-per-share tender offer for Longs until Oct. 15. The tender was due to expire on Monday.

"All other terms and conditions of the tender offer remain unchanged," CVS said in a statement.

On Friday, Walgreen Co. offered to buy Longs for $75 a share, or about $2.8 billion, hoping to unseat the offer from CVS, which Longs has already accepted.

Walgreen CEO Jeffrey Rein said in a letter to Longs' board of directors that the company would prefer to negotiate with Longs directly but also was prepared to take the offer directly to the company's shareholders.

Rein also noted in the letter, which Walgreen disclosed in a press release late Friday, that Walgreen had expressed an interest in acquiring Longs earlier for $70 a share but never received due diligence materials from the company.

Longs has faced dissent from some shareholders over the value of the CVS deal. Pershing Square Capital Management, which owns about 3 million shares—a 9.2% stake—of Longs, has previously said that CVS's bid didn't adequately value Longs' real estate holdings.

Two other major shareholders, Advisory Research and CtW Investment Group, have also publicly questioned the CVS deal.

Longs said Sunday it was reviewing Walgreen's offer "in accordance with the terms of its existing merger agreement with CVS Caremark."

CVS noted Walgreen's offer still had to pass due diligence and get regulatory approval.

"Our offer represents a full and fair price for Longs' shares, and we stand firm on our price," said Tom Ryan, CVS' chairman, president and chief executive. "Furthermore, the CVS Caremark's offer has cleared all regulatory hurdles and provides certainty of completion to Longs shareholders."