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.

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.