Tags: Walgreen | Europe | drugstore | Financial Times

Walgreen Under Shareholder Pressure to Relocate to Europe: FT

Monday, 14 Apr 2014 10:27 AM

U.S. drugstore chain operator Walgreen Co. is under pressure from a group of shareholders to consider relocating to Europe to gain tax benefits, the Financial Times reported.

Shareholders owning nearly 5 percent of the company's shares lobbied Walgreen's management to use its ownership stake in Alliance Boots to change its legal domicile to Europe, the financial daily said.

The push was made at a private meeting between the shareholders and company executives in Paris on Friday, the FT reported.

Such a move, known as tax inversion, could significantly reduce Walgreen's taxable income in the United States, which has one of the world's highest corporate tax rates.

The meeting was attended by Walgreen Chief Executive Greg Wasson, Chief Financial Officer Wade Miquelon and Stefano Pessina, the Italian billionaire chairman of Alliance Boots, Financial Times said.

The shareholder group, which includes Goldman Sachs Investment Partners and hedge funds Jana Partners, Corvex and Och-Ziff, requested the meeting with Walgreen, which has refused to consider relocating, the paper said, citing people familiar with the matter.

The drugstore retailer bought 45 percent of Alliance Boots, which runs Europe's largest pharmacy chain, in 2012, with an option to buy the rest in 2015.

The financial daily said the shareholder group also wanted a greater role for Alliance Boots' management team in running the merged business.

Deerfield, Illinois-based Walgreen reported a lower-than-expected profit for the quarter ended Feb. 28 but said it expected a bigger boost this year from its partnership with Alliance Boots.

Walgreen, Goldman Sachs Investment Partners, Jana Partners, Corvex and Och-Ziff were not immediately available for comment.

An Alliance Boots spokeswoman would not comment, saying it was a Walgreen matter.

Walgreen shares were up 1.05 percent in premarket trading on Monday. They had closed at $64.26 on the New York Stock Exchange on Friday.

© 2017 Thomson/Reuters. All rights reserved.

   
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U.S. drugstore chain operator Walgreen Co is under pressure from a group of shareholders to consider relocating to Europe to gain tax benefits, the Financial Times reported.Shareholders owning nearly 5 percent of the company's shares lobbied Walgreen's management to use its...
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2014-27-14
Monday, 14 Apr 2014 10:27 AM
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