Longs Drug Stores has recommended that shareholders accept a $2.54 billion (U.S.), or $71.50 per share takeover offer from larger rival CVS Caremark Corp.
California-based Longs also said in the filing it had held talks with another suitor that had offered $70 per share, but negotiations faltered over concerns about antitrust hurdles.
Longs did not name the other suitor.
Walgreen had been that other bidder but walked away due to concerns that regulatory scrutiny would scuttle the deal or force divestitures, said the source. CVS and Walgreen have been expanding beyond the traditional drugstore business in recent years to reap more of the money spent on other areas of health care by an aging U.S. population.
In buying Longs, CVS would raise its profile in California and gain a leading position in Hawaii, where it doesn't now operate.
