Longs held other merger talks, recommends CVS bid
PHILADELPHIA (Reuters) - Longs Drug Stores Corp LDG.N has recommended that its shareholders accept a $2.54 billion takeover offer from CVS Caremark Corp (CVS.N) after holding unsuccessful merger talks with a different, unnamed suitor.
Longs urged stockholders on Monday to accept a $71.50-per-share offer from larger rival CVS. In a filing with the U.S. Securities and Exchange Commission, Longs said it had held talks with another suitor that had offered $70 per share, but negotiations faltered over concerns about antitrust hurdles.
Longs declined to comment on the other suitor. CVS's main competitor, Walgreen Co (WAG.N), declined to comment on whether it had held talks with Longs.
"As a matter of policy, we don't comment on any potential acquisitions or discussions," said Walgreen spokesman Michael Polzin.
"We've previously talked about how we analyze a lot of potential acquisitions, both retail and nonretail," Polzin said.
CVS and Walgreen have been expanding beyond the traditional drugstore business in recent years to reap more of the money spent on other areas of health care by an aging U.S. population.
In buying Longs, CVS would raise its profile in California and give it a leading position in Hawaii, where it doesn't operate. Walnut Creek, California-based Longs' other stores are located in Nevada and Arizona.
CVS also will gain Longs' Rx America subsidiary, a prescription benefits management services company with more than 8 million members.
Longs shares were up 15 cents at $72.14 in morning New York Stock Exchange trade, while CVS was down 30 cents at $38.29.
(Reporting by Jessica Hall in Philadelphia and Brad Dorfman in Chicago; Editing by Lisa Von Ahn)
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