Walgreens Set to Go Private, But Investors May Still Find Value in the Stock

Walgreens Boots Alliance will be taken private by Sycamore Partners Management for $11.45 per share, with the transaction expected to close in H2 2025. Despite this, the stock is trading above the takeover price due to a unique aspect of the deal: Sycamore Partners plans to sell Walgreens' medical clinic business, potentially yielding a $3 per share chit for investors.

Walgreens Boots Alliance (WBA) has agreed to be taken private by Sycamore Partners Management for $11.45 per share, with the transaction expected to close in the second half of 2025. Despite this, the stock is currently trading above the takeover price due to a unique aspect of the deal: Sycamore Partners plans to sell Walgreens' medical clinic business, potentially yielding a $3 per share chit for investors.

The deal, approved by shareholders, marks a significant shift for Walgreens, which has faced corporate missteps and market saturation in recent years. The company, once a growth leader, has struggled with initiatives such as expanding into pharmacy benefits management and healthcare clinics, which did not meet expectations. As a result, Walgreens has been working to right-size its business, including closing locations, a move that is often unpopular with investors.

The nuance in the deal lies in the medical clinic business. Sycamore Partners plans to sell this segment, potentially generating a significant payout for investors. However, the timeline and final sale price of the clinic business are uncertain, adding a layer of risk to the investment. While the potential upside is substantial, the uncertainty surrounding the sale means that the $3 chit could be worthless or take a long time to materialize, reducing its value.

Investors interested in Walgreens should be aware of the risks involved. The deal means that Walgreens will no longer be a publicly traded company in a year, and the stock will be delisted. While the company may eventually go public again with a different stock, it is unlikely to happen in the near future. Therefore, the investment should be considered a high-risk, high-reward play, suitable only for more aggressive investors.

In summary, Walgreens Boots Alliance is undergoing a complex takeover that offers potential upside through the sale of its medical clinic business. However, the deal comes with significant risks, including uncertainty about the sale and the company's future as a publicly traded entity. Investors should approach this opportunity with caution and a thorough understanding of the risks involved.

References:
[1] https://www.fool.com/investing/2025/08/10/where-will-walgreens-be-in-1-year/
[2] https://www.inkl.com/news/walgreens-boots-alliance-s-quarterly-earnings-preview-what-you-need-to-know
[3] https://finance.yahoo.com/news/where-walgreens-1-163200735.html