Walgreens-Drugstore.com Deal Under Investigation

Is the $409 million price pharmacy chain Walgreens is willing to pay to acquire online counterpart Drugstore.com not enough?

On March 24, the same day Walgreens and Drugstore.com announced the deal, at least two shareholder litigation firms said they launched investigations against the dot-com and its board of directors.

Both Kendall Law Group of Dallas and San Diego-based Robbins Umeda said Drugstore.com is selling for less than its shareholder value.

Robbins Umeda said in a press release that Drugstore.com reported fourth-quarter net sales of $123.6 million of Feb. 8, which beat consensus estimates of $120.6 million.

What’s more, Robbins Umeda said that the merger agreement contains a termination fee over $15 million, which Drugstore.com will have to pay under certain circumstances, such as the board of directors agreeing to a higher offer.

In its annual report filed with the Security and Exchange Commission on March 18, Drugstore.com reported a 21.5% rise in net sales to $456.5 million for fiscal year 2010. The company also shipped more than 7 million customer orders, which was 19.2% more than the previous year.

Walgreens, which did $67 billion in sales last year, said it wants Drugstore.com to help boost its ecommerce presence. The acquisition will give Walgreens a buyer file of 3 million names, and the URLs for Drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com.

According to Walgreens, Drugstore.com will maintain separate branding of its websites after the transaction closes. A closing date was not announced.