Walgreen Bulls Bet Investor Activism Will Cure Tax Pain
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The entry of an activist shareholder into the board of Walgreen Co. may be just what the doctor ordered for options traders betting on the largest U.S. pharmacy chain after a 17 percent plunge.
While the Deerfield, Illinois-based company’s stock has tumbled since reaching a record in June, bullish contracts are the most expensive relative to bearish ones in almost seven years, data compiled by Bloomberg show. Investors are lured by the potential for share buybacks and earnings growth as hedge fund Jana Partners LLC, which has agitated for a more shareholder-friendly use of Walgreen’s cash, struck a deal with the company on three board seats.