WALGREENS IS THIRD DRUG STORE CHAIN TARGET FOR DART GROUP
WALGREENS IS THIRD DRUG STORE CHAIN TARGET FOR DART GROUP: the Chicago-based chain reported in an Oct. 12 release it was "recently advised that an entity controlled by the Haft family is seeking clearance under the Hart-Scott-Rodino Act to purchase $ 15 mil. or more of Walgreens stock. It is not known how much, if any, Walgreens stock the Hafts own." A bid for Walgreens from Herbert and Robert Haft, former owners and management of Dart Drug, would mark a return of the two corporate raiders to their roots in the chain pharmacy business. In their first "greenmail" experience in the chain drug industry in 1985, the Hafts acquired a 5% stake in the Jack Eckerd drug chain, which parlayed into a $ 9 mil. gain. More recently, the Hafts expressed interest in Revco prior to its management-led leveraged buyout in January 1987. Over the past few years, the Hafts have focused their financial interests on grocery store and department store chains, including: Dayton Hudson, Kroger, Jumbo Food Stores, Safeway, Stop & Shop, Supermarkets General, Woolworth, and Zayre. Although Kroger management has successfully fought off a takeover bid from Kohlberg Kravis and, instead, will pursue an internal restructuring, the Hafts have expressed their continued interest in the supermarket/drug store business. Walgreens has $ 200 mil, in cash to fight off the Hafts' advances. "We will monitor the Haft situation carefully," Chairman Charles Walgreen said, "and take all actions necessary to protect our company and its shareholders." In a report of fiscal 1988 results, Walgreens noted 88 new drugstore openings in the 12 months ending Aug. 31, giving the chain a total 1,444 drug stores. In addition, Walgreens remodeled 60 stores. One hundred new store openings are planned for fiscal 1989, Walgreens said. Pharmacy sales at "comparable" Walgreens stores, those open at least one year, increased 26.1% in fiscal 1988 to $ 1.3 bil., the chain reported for the 12 months ended Aug. 31. "Prescription sales now comprise 27% of overall sales, up from 15% just seven years," the chain noted. Drug Store Division sales, which account for over 97% of corporate volume, increased 14.4% during the 12 months, Walgreens reported, with sales at comparable stores up nearly 11%. The percentage of drugstore sales to total sales is likely to increase in the future; in August, Wallgreens sold its 91 free-standing Wag's restaurants to Marriott Corp. Overall, corporate volume advanced 14.1% to $ 4.9 bil. in fiscal 1988. Net earnings rose 24.7% to about $ 129 mil. The chain said that its bottom line was aided by a lower tax rate. For the fourth quarter ended Aug. 31, Walgreens reported a sales increase of about 12% to $ 1.2 bil., and a 22% jump in net income to $ 319. mil.
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