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KKR to sell remaining stake in WBA

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Investment firm to retain seat on Walgreens Boots Alliance board

DEERFIELD, Ill. — Affiliates of private equity firm Kohlberg Kravis Roberts & Co. (KKR) plan to sell their remaining interest in Walgreens Boots Alliance (WBA) through a secondary stock offering.

WBA said Wednesday that the KKR affiliates aim to sell 20.46 million shares of WBA common stock in an underwritten secondary offering. And in a separate offering, the KKR affiliates have agreed to sell 2 million shares of WBA common stock to an affiliate of Stefano Pessina, executive vice chairman and chief executive officer of WBA.

Stefano Pessina_Walgreens Boots Alliance

Stefano Pessina, Walgreens Boots Alliance

The company said the agreement with Pessina, dated Oct. 31, is subject to the completion of the underwritten secondary offering.

With the closing of both offerings, the KKR affiliates — currently holding about 2.1% of WBA’s outstanding common stock — will no longer hold any WBA common shares.

A WBA spokesman said Dominic Murphy, a member of KKR and the head its United Kingdom operations and European health care industry team, will remain a member of the WBA board of directors.

WBA had issued approximately 52.46 million shares to KKR affiliates in connection with the Alliance Boots merger, which closed at the end of 2014. Murphy had joined the Walgreens board when the drug chain completed the first part of the merger transaction with Alliance Boots in August 2012.

This past May, the KKR affiliates sold 15 million WBA shares in an underwritten secondary offering, followed by the sale of another 15 million shares in an underwritten secondary offering in August. The latter transaction had put KKR under the 4% ownership threshold entitling it to designate a member to the WBA board, but WBA said in a July 26 filing with the Securities and Exchange Commission that Murphy would remain on the board.

Also in May, activist investor Barry Rosenstein, managing partner of hedge fund JANA Partners LLC, stepped down from the WBA board after reducing his investment in the company.

Rosenstein, who had been a director since September 2014, disposed of 6 million shares of WBA common stock, leaving JANA with about 4.579 million shares of the company, a May 18 SEC filing said. Under the companies’ Nomination and Support Agreement, Rosenstein would resign from the Walgreens board if JANA and its affiliates’ holdings of Walgreens common stock fell below 6.25 million shares.


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