Walgreens Comeback? Private Equity Circling for a Buyout

Core Viewpoint - A private equity firm is considering a buyout of Walgreens Boots Alliance, which has faced challenges in its retail business model but shows signs of potential recovery and valuation upside [1][2][4]. Financial Performance - Walgreens Boots Alliance reported a 4.7% increase in net revenues year-over-year, reaching $38.6 billion, indicating resilience despite market challenges [6]. - The company's "other income" surged to nearly $1.5 billion for the quarter, a significant increase from $195 million the previous year, contributing positively to its financial outlook [7]. - The net loss per share improved from $6.85 in the same quarter last year to $3.30, suggesting a potential for better future projections and offers from buyers [8]. Market Sentiment - There has been a 27% decline in short interest for Walgreens stock over the past month, indicating a shift in investor sentiment towards a more bullish outlook [9]. - Institutional buying reached $477 million in the past quarter, further supporting the positive sentiment around the stock and potential buyout [10]. Acquisition Details - Walgreens has agreed to be acquired by an entity affiliated with Sycamore Partners for $11.45 per share, with expectations that the stock could trend towards $12.50 in the near future based on current market patterns [11]. - The current trading at 0.8 times its book value suggests room for negotiation, with a valuation closer to 1.0 times P/B potentially offering more upside for shareholders [12].