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AmerisourceBergen shares rise and fall amid Walgreens takeover claim

Walgreens is Amerisource's largest customer.

AGENDA24P.Steven H. Collis, Chairman, President and Chief Executive Officer for Amerisource Bergen speaks with a reporter Friday July 1, 2016 at Amerisource Bergen.
AGENDA24P.Steven H. Collis, Chairman, President and Chief Executive Officer for Amerisource Bergen speaks with a reporter Friday July 1, 2016 at Amerisource Bergen.Read moreWilliam Thomas Cain/For The Inquirer

Shares of drug distributor AmerisourceBergen Corp. of Chesterbrook opened at more than  $100 a share Tuesday morning after the Wall Street Journal, citing unidentified sources, reported that the drug distributor's largest shareholder and customer, Walgreens Boots Alliance Inc., had proposed buying the 74.1 percent of AmerisourceBergen that it didn't already own.

But by Wednesday, ardor had cooled, trimming 1.5 percent off the stock to about $96 at around noon.

The stock last topped $100 on Jan. 30. But it swooned in the early February stock market plunge and after its modest Feb. 6 earnings report. That showed a "new normal of low single-digit" profit growth that is "insufficient" to keep AmerisourceBergen shares at the $100 level, analyst John Ransom told clients of Raymond James & Associates.

AmerisourceBergen relies on Walgreens for nearly one-third of its orders. A takeover by Walgreens would underline the fragility of the chain-drugstore business, which faces stiff competition from Amazon and other online drug providers.

Walgreens last year agreed to buy nearly 2,000 stores from Rite Aid Corp. of Camp Hill, Pa., after a proposal to buy all of Rite Aid fell through. Rival CVS Health Corp. last year announced plans to buy health insurer Aetna, which could guarantee CVS a captive market of consumers.

AmerisourceBergen is among the Philadelphia-area companies targeted by state Pennsylvania Attorney General Josh Shapiro and his counterparts in other states for its possible responsibility for flooding the U.S. with addictive opioid painkillers in recent years, leading to hundreds of thousands of deaths.

About 40 Teamsters rallied outside the Sofitel Hotel Philadelphia last March, blaming AmerisourceBergen for the crisis as executives held a shareholders meeting inside. AmerisourceBergen CEO Steven Collis and other industry executives say the responsibility for the opioids crisis rests with doctors who prescribe them improperly.

Walgreens CEO Stefano Pessina sent intermediaries last month to Collis to talk about taking the drug distributor private, but the two sides haven't agreed to a price, the Journal reported. The companies wouldn't comment.

Walgreens has more than 13,000 drugstores in the U.S., U.K. and other countries. Walgreens also runs the Duane Reade drugstores in New York and markets drugstore products under a number of brands.

Walgreens isn't the only company in health care or other industries to seek mergers to fend off competitive threats from technology giants.

The consumer shift to online shopping is eating into the sales of the retail side of the drugstore business. In addition to filling prescriptions and selling over-the-counter medicines, drugstore chains sell items as disparate as cotton swabs and cosmetics that can now easily be bought online through Amazon and other e-commerce players.