Individuals stroll by a Walgreens on November 3, 2024 in Brookline, Massachusetts.
Danielle DeVries | CNBC
Shares of Walgreens jumped about 20% on Tuesday on a report that the corporate is in talks to promote itself to personal fairness agency Sycamore Companions.
Walgreens and Sycamore have been discussing a deal that might be accomplished early subsequent yr, The Wall Road Journal reported, citing folks accustomed to the matter. New York-based Sycamore would doubtless dump items of Walgreens’ enterprise or work with companions, the Journal reported.
A Walgreens spokesperson declined to touch upon the reported talks.
The report comes throughout a tough interval for the retail pharmacy large. The corporate’s inventory was down greater than 60% for the yr earlier than its climb Tuesday.
Walgreens — squeezed by the transition out of the Covid pandemic, a management shakeup, pharmacy reimbursement headwinds and its wobbly push into well being care — has underperformed Wall Road’s earnings expectations for two straight quarters. Walgreens’ pharmacy enterprise specifically has been flailing attributable to falling reimbursement charges for pharmaceuticals and a number of other elements pressuring the entrance of the shop, corresponding to inflation and elevated competitors.
The corporate is attempting to regain its footing with a brand new CEO, health-care business veteran Tim Wentworth. Since getting into the function in October 2023, Wentworth has moved to slash prices at Walgreens.
In October, Walgreens stated it plans to shut roughly 1,200 of its drugstores over the following three years, together with 500 in fiscal 2025 alone. Walgreens has round 8,700 places within the U.S., 1 / 4 of which it says are unprofitable. The corporate has additionally scaled again its push into major care by slicing its stake in major care supplier VillageMD.
Walgreens has reportedly been seen as a possible personal fairness goal previously.
In 2019, personal fairness agency KKR made a roughly $70 billion buyout provide to the corporate, the Monetary Occasions and Bloomberg reported on the time.
