CNBC’s David Faber upgraded the deal to “alive” on Feb. 18 after previously saying Jan. 27 that the deal was “mostly dead,” according to the report.
Bloomberg reported Jan. 31 that Sycamore had been talking with private credit firms about debt financing for a possible Walgreens deal.
Jeff Jonas, a portfolio manager at Gabelli Funds and a Walgreens investor, told Bloomberg that a prospective acquisition would be complicated because the drugstore chain carries a lot of debt, which makes a leveraged buyout challenging. He remains skeptical of a deal.
Walgreens announced Jan. 30 that it was suspending its quarterly cash dividend for the first time since 1932 as it reassesses capital allocation amid a long-term turnaround effort. The company posted a $245 million operating loss in the first quarter of fiscal 2025 — the three months ended Nov. 30 — a substantial drop from the $39 million operating loss recorded in the same quarter in FY 2024.
The company has also enlisted advisers Perella Weinberg Partners and AlixPartners to assist with operations and balance sheet of the company as the company continues to face financial pressures. VillageMD, the healthcare clinic backed by Walgreens, is also exploring restructuring with the help of consulting firms Evercore and Alvarez & Marsal.
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