DealZone

Deals wrap: Walgreen prescribes drugstore.com buy

A sign for a Walgreens store is seen in Belle Glade, Florida January 6, 2010. REUTERS/Carlos BarriaWalgreen plans to buy drugstore.com for $429 million, expanding the online presence of the world’s largest drugstore chain.  Drugstore.com shareholders will receive $3.80 a share, which is more than double the company’s closing stock price on Wednesday.

A sale of the British government’s $107 billion stake in Lloyds Banking Group and RBS may start next year, Bloomberg said, citing four people familiar with the matter.

Geothermal energy is likely to attract interest as investors rethink the outlook for nuclear power following the crisis in Japan, writes Leonora Walet and Tessa Dunlop. Japan sits on enough untapped geothermal power to replace all of its planned nuclear stations over the next decade, but the quake-prone country’s only plan to harness that energy’s potential is to develop hot springs.

Cheap valuations along with their respectable free cash flow and extensive real estate assets have made discount and dollar stores attractive targets for companies and private equity firms, and it looks like Wall Street can wring a few billion dollars more out of them, writes NR Sethuraman.

Dutch navigation and digital map maker TomTom, which is struggling with competition from offerings by Google and Nokia, is not looking to sell its mapping unit, denying a report it might consider a sale. TomTom exec Taco Titulaer told Reuters “our content assets are core to our strategy and product offering”.

DealZone Daily

U.S. drugstore operator Walgreen is to buy rival Duane Reed for $618 million from private equity firm Oak Hill Capital Partners, giving the company the market lead in New York. The acquisition brings the company 257 new stores in the city and has prompted analysts to think that struggling chain Rite Aid might make an attractive target for Walgreen rival CVS Caremark as it looks to catch up.

Britain’s Babcock International has increased a proposed offer to buy defence firm VT Group to as much as 1.29 billion pounds, but its advances have again been rejected.

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In other media:

Beijing’s sovereign wealth fund, China Investment Corp, is investing $1.5 billion with three private equity secondary specialists – firms that buy positions in buyout funds from other investors – the FT reported. CIC will put $500 million with each of Lexington Partners, Goldman Sachs and Pantheon Ventures in special accounts that will be kept separate from the firms’ main funds.

Walgreen doubles its presence in Times Square

Walgreen’s deal to purchase privately held Duane Reade for $618 million gives it 257 new retail stores in the New York City area and a double presence in New York’s Times Square.

“We like their footprint, how it matches up with us,” Walgreen Chief Executive Greg Wasson said of Duane Reade in a Reuters interview. “(It) gives us a leading presence in Manhattan as well as supplements what we have in the boroughs in New York.”

Walgreen operates 70 stores in the New York area. Once the deal closes, Walgreen will operate more than 300 stores in the wider New York area, a tally Wasson said would put it on par with main rivals including Rite Aid and CVS Caremark.