Investing.com -- Shares of Walgreens (NASDAQ: WBA) fell sharply by 9% following reports that a potential acquisition by private equity firm Sycamore Partners may not materialize. CNBC's David Faber indicated that the deal, which had been a significant point of speculation for the company's future, is "mostly dead."
The decline comes after a period of negotiation talks that were first reported in December. Walgreens had been actively seeking a buyer and had engaged with several potential suitors, with Sycamore Partners emerging as the primary candidate. At the time, Walgreens' market capitalization stood at around $9 billion after a rally in its shares, with the company also shouldering signficant debt.
This development represents a setback for Walgreens, which has made previous attempts to go private. In 2019, the pharmacy chain was valued at over $55 billion but failed to secure a deal. KKR, another private equity group, had also shown interest in a buyout proposal at that time.
Walgreens has faced challenges in its retail segment due to persistent inflation impacting consumer spending and has also struggled with low reimbursement rates in its pharmacy operations. These difficulties have been a drag on the company's performance, prompting exploration of a sale as a strategic alternative.
The news of the faltering deal with Sycamore Partners has evidently rattled investors, leading to a significant drop in the stock price. As the company navigates these uncertainties, stakeholders are closely monitoring any further developments that might affect the company's financial health and strategic direction.
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