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Prospect News home > News index > List of issuers L > Headlines for Longs Drug Stores Corp. > News item
Published on 9/12/2008 in the Prospect News Special Situations Daily.

Advisory Research will not tender Longs Drug Stores shares in CVS Caremark offer

By Lisa Kerner

Charlotte, N.C., Sept. 12 - Longs Drug Stores Corp. investor Advisory Research, Inc. said it does not plan to tender its clients' 3.3 million shares into CVS Caremark Corp.'s offer for the company "unless there is some dramatic change of circumstances."

The investor made its comments in a Sept. 12 letter to Longs included in a schedule 13D/A filed with the Securities and Exchange Commission.

Advisory Research believes Longs' board did not fully analyze the value of Longs' real estate and leases. The investor cited a RiskMetrics report in support of its claim.

Longs disclosed that the board did not request an appraisal of the company's real estate or leases, and the board did not analyze the value of the real estate to CVS Caremark, the letter said.

Advisory Research asked Longs' board to give fellow shareholder Pershing Square Capital Management, LP time to seek better offers for the company.

Pershing Capital notified Longs that it would not tender its 3.1 million shares in the CVS Caremark offer and that it had four other potential buyers for the company.

The potential buyers include two separate strategic buyers, a real estate investment trust and a real estate private equity investor, a prior SEC filing said.

According to Pershing Square, CVS Caremark, a Woonsocket, R.I., drugstore chain, is contractually obligated to hold its offer open for one year.

Pershing Square said it does not believe CVS Caremark's minimum tender condition of 66 2/3% of the outstanding shares will be satisfied by Sept. 15, 2009.

Longs, a Walnut Creek, Calif., drugstore chain, agreed to be acquired by CVS Caremark in August for $71.50 per share, or $2.9 billion including debt.


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