(Adds company comment in paragraph 7, updates share price)
April 14 U.S. drugstore chain operator Walgreen
Co is under pressure from a group of shareholders to
consider relocating to Europe to gain tax benefits, the
Financial Times reported.
Shareholders owning nearly 5 percent of the company's shares
lobbied Walgreen's management to use its ownership stake in
Alliance Boots to change its legal domicile to Europe,
the financial daily said.
The push was made at a private meeting between the
shareholders and company executives in Paris on Friday, the
paper said in a report on Sunday. (link.reuters.com/quf58v)
Such a move, known as tax inversion, could significantly
reduce Walgreen's taxable income in the United States, which has
one of the world's highest corporate tax rates.
The meeting was attended by Walgreen Chief Executive Greg
Wasson, Chief Financial Officer Wade Miquelon and Stefano
Pessina, the Italian billionaire chairman of Alliance Boots,
Financial Times said.
The shareholder group, which includes Goldman Sachs
Investment Partners and hedge funds Jana Partners, Corvex and
Och-Ziff, requested the meeting with Walgreen, which has refused
to consider relocating, the paper said, citing people familiar
with the matter.
"We regularly meet with our investors and always welcome
their input. Over the past year, we have made significant
progress in our strategic partnership with Alliance Boots as we
move toward the window for exercising the second step of our
transaction," Walgreen said in an email statement on Monday.
The drugstore retailer bought 45 percent of Alliance Boots,
which runs Europe's largest pharmacy chain, in 2012, with an
option to buy the rest in 2015.
The financial daily said the shareholder group also wanted a
greater role for Alliance Boots' management team in running the
Deerfield, Illinois-based Walgreen reported a
lower-than-expected profit for the quarter ended Feb. 28 but
said it expected a bigger boost this year from its partnership
with Alliance Boots.
Goldman Sachs Investment Partners, Jana Partners, Corvex and
Och-Ziff were not immediately available for comment.
An Alliance Boots spokeswoman would not comment, saying it
was a Walgreen matter.
Walgreen shares were up 2.7 percent at $66.01 in afternoon
trading on Monday on the New York Stock Exchange.
(Reporting by Shailaja Sharma and Siddharth Cavale in
Bangalore; Editing by Saumyadeb Chakrabarty and Savio D'Souza)