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The Shareholder Forumtm

independent review of issues relating to

Stock Buyback Policies


Walgreen Co.

for shareholder consideration in decisions about a

proposed merger into

Walgreens Boots Alliance, Inc.





For a printable copy of this report, click here.

Forum Report: Walgreen Stock Buybacks

Long Term Investor Interests in Proposed Walgreen Stock Buybacks

The Shareholder Forum has been asked to define issues relating to stock buyback commitments that should be considered in decisions about a proposed merger of Walgreen Co. into Walgreens Boots Alliance. Since addressing the interests of Walgreen shareholders in this case can be expected to establish broadly applicable standards for evaluating stock buyback policies of other companies, with or without related merger transactions, we encourage anyone with corporate or fund management responsibilities to participate.[1]

Preliminarily, discussions with Forum participants representing various perspectives have suggested the following framework for an investor’s analysis of buybacks in the context of Walgreen’s proposed merger, based on the investor’s own risk and holding period assumptions:


Calculated equity share of future enterprise – A basic financial analysis of both the merger transaction and projected buybacks is required to determine the ultimate allocations of equity per share at the end of an investor’s expected holding period, using ranges of assumptions about buyback prices.


Risk impact on earnings projections – Assumptions must be made about the effects of reduced stockholders equity on both (a) credit access and costs and (b) ability of the enterprise to adapt to adversity and opportunity, which can then be reflected in either operating projections or risk discount for the present value of the enterprise at the end of the investor’s holding period.


Comparison of committed and opportunistic buybacks – Assuming publicly reported buyback commitments will generate higher stock purchase prices during the buyback period and consequently lower future values, an investor must estimate the relative benefits of this alternative based on its anticipated holding period.

Please offer your views of how this should be refined, and how it should be applied specifically to the Walgreen situation.[2] After learning the views of a broad range of long term investor interests, the Forum will present the defined issues for comment by Walgreen management and then invite questions and views of the company's shareholders..

GL – October 23, 2014

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335



[1] For a summary of the process, see “Initiating the Definition of Issues.” Participation will be supported by the privacy rules and other policies for open programs stated in the Forum’s "Conditions of Participation."

[2] Reference information for the Walgreen project, and an online comment form for presenting observations anonymously, can be found at




This program is open to all shareholders of Walgreen Co. (WAG) and to any fiduciaries or professionals concerned with their investment decisions. Participation is free of charge, according to the Shareholder Forum's standard Conditions of Participation.

The purpose of the program is to define issues relevant to long term shareholder interests in the proposed merger of Walgreen Co. into Walgreens Boots Alliance, Inc., and to support an impartial review and access to information required for investor consideration of the issues. As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. Forum polices are intended to support anonymous communication, and provide that participants will not be identified or quoted without their explicit permission.

Information requests and suggestions of issues that may be relevant to Darden shareholder interests can be addressed to the Shareholder Forum at


The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.