The drug store behemoth is out to acquire all of the UK’s Alliance Boots, forming one of the world’s largest pharmacy companies. But its former CFO just lobbed serious accusations at the company, which has left it scrambling to clean up its image.
Andrew Kelly / Reuters
It's been a tough couple of months for Walgreens and its quest to buy the British pharmacy giant Alliance Boots.
Walgreens, one of the country's three largest drugstore chains and a serial acquirer of regional chains like Super D Drug, USA Drug, and Duane Reade, had the option of moving its headquarters (and tax base) out of America as part of the deal, although it ultimately decided against it. That decision, motivated by hostility to so-called tax inversion deals in Washington and among consumers, did not go over well with investors, sending its stock price plummeting by 15% and causing a sizable earnings hit.
Now things are getting even uglier. A defamation lawsuit filed its former CFO Wade Miquelon is leading CtW Investment Group, a shareholder representative organization, to call into question what secrets the company's upper management may be keeping from its stockholders to push the Boots acquisition through. Questions are also being raised about just how much an activist hedge fund is pulling the strings behind the scenes of the deal.
Now, with a judge deliberating whether to approve Walgreen's attempt to seal Miquelon's lawsuit, here's a look at what the complaint and the company's initial response to it show about what shareholders do and don't know regarding the potential merger -- and Miquelon's apparent ousting.
The article was based on sources inside Walgreens and on the board, and insinuated Miquelon missed his Fiscal Year 2016 earnings forecast by more than $1 billion. This is Miquelon's basis for his suit, which accuses his former employer of defamation, violation of his separation agreement, and "torturous interference" with future career prospects.
After the story came out, company officers reached out to Miquelon, according to his suit, to express sympathy over the article and alert him to a damning memo by Walgreen's head of investor relations.
In it, the investor relations representative reported that in meetings with other investors, Walgreens CEO Gregory Wasson and the company's largest investor, Alliance Boots executive chairman and Monte Carlo resident Stefano Pessina, had made "disparaging and defamatory" remarks about Miquelon, board memebers, and other of the company's upper management to investors leading up to Miquelon's resignation.
Mario Anzuoni / Reuters
via IFTTT
No comments:
Post a Comment