A lawsuit against drugstore chain Walgreens alleges it withheld information from shareholders about a proposed merger.
The Washtenaw County Employees' Retirement System in Michigan filed the lawsuit against Walgreens on April 10, alleging the company also made overstatements about its business that led to an artificially inflated stock price.
In 2012, Walgreens announced a partnership with Alliance Boots GmbH and said it would look to build a global pharmacy-led health and well-being enterprise. That year, Walgreens acquired 45 percent of Alliance, and this past December, it acquired the remaining 55 percent. In the end, Walgreens purchased Alliance for about $12 billion total in cash and stock, the lawsuit said.
The lawsuit said that as part of the merger, Walgreens set goals to have $9 billion to $9.5 billion in “adjusted earnings before interest and taxes.” However, by the summer of 2013, the company allegedly was $300 million below its target number and allegedly failed to inform investors, the lawsuit said.
The plaintiff seeks class-action status for shareholders who held Walgreens stock between March 25, 2014 and August 5, 2014. They are represented by James E. Barz, Frank A. Richter, David C. Walton and Brian E. Cochran of Robbins Geller Rudman & Dowd LLP in Chicago; and Thomas C. Michaud of Vanoverbeke Michaud & Timmony, P.C. in Detroit.
United States District Court, Northern District of Illinois Eastern Division, case number 1:15-cv-03187.