Options trade idea : Walgreen (WAG)

In 2014 Walgreens purchased Switzerland-based Alliance Boots. The two companies merged to form a new holding company, Walgreens Boots Alliance Inc. The company trades on the Nasdaq under the symbol WBA.

     

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Analyze: Walgreen (WAG)

A day after reaching its biggest deal ever, Walgreen (WAG) found itself under pressure as Wall Street analysts questioned the price, timing and necessity of a transformative deal, and the company's shares fell sharply.
The Deerfield, Ill., company plans to buy nearly half of Alliance Boots GmbH for $6.7 billion. Walgreen will also hold an option to swallow the rest of the European pharmacy operator in almost three years.

Walgreen's stock fell 2.9% to $29.21 a share Wednesday on top of its 5.9% slide Tuesday as the stock hit its lowest point since September 2010.

Among the concerns analysts raised Wednesday: an expensive purchase price; the use of Walgreen shares already well off their highs; the distraction for a company that already faces headaches at home; and an increase in exposure to the troubled European economy.

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Meanwhile, KKR & Co. (KKR)is being lauded for the deal. The private-equity firm's stock rose 6.8% Tuesday in one of its best days since it began trading on the New York Stock Exchange in 2010. Wednesday, it gained 2.1% to $12.74.