Kyle Bean for Fortune
By Phil Wahba
September 8, 2014

Jana Partners has landed two seats on the board of Walgreen (WAG), including one for its founder and managing partner Barry Rosenstein, giving the activist investor outsize say over how the drugstore chain conducts its affairs with only a 1.2% stake, and sparing Walgreen from the possibility of an ugly fight with a shareholder.

Walgreen, which runs the largest U.S. pharmacy chain by number of stores, recently lowered its financial forecasts and two top executives, including its finance chief, left, creating a sense of crisis around the retailer and sending shares down.

It also last month decided not to relocate its corporate headquarters abroad after it completes the acquisition of the the 55% European drugstore chain Alliance Boots GmbH. Such a move, known as a “tax inversion” likely would have lowered its tax rate significantly. Jana had been pushing Walgreen to do the inversion.

Activist investors typically buy shares in companies they see as undervalued and advocate for steps such as divestitures, management shake-ups and financial engineering. Pretty often, these lead to ugly public spats—Olive Garden owner Darden Restaurants (DRI) is under siege by activist investor Starboard Value, which is trying to replace the company’s entire board, and earlier this year Carl Icahn was feuding openly and bitterly with eBay (EBAY) executives and directors over his proposal the company sell off PayPal. But the Wall Street Journal reported that Walgreen CEO Greg Wasson and Rosenstein have had “friendly and constructive” conversations on getting more out of Walgreen shares.

“We are very pleased to welcome Barry to the board,” Wasson said in a statement on Monday. “Barry’s experience and expertise in building shareholder value on behalf of companies will be important as we establish Walgreens Boots Alliance.”

Jana has become a more visible investment firm of late—this summer, it pushed PetSmart (PETM) to look into selling itself, which the retailer is now doing. The hedge fund’s ideas have been adopted at other companies such as grocer Safeway (SWY), among others. But landing two seats on the Walgreen board is arguably his biggest coup yet.

The Wall Street Journal reported that Jana will now work with Walgreen to cut costs and change the kinds of products the drugstore chain stocks on it shelves, and push for a bigger stock buyback plan. Rosenstein will join Walgreen’s board immediately, and Jana will place a second director as soon as it identifies a candidate Walgreen accepts, expanding the board to 15.

Walgreen is the second biggest holding in Jana’s portfolio , after data center company Equinix, according to Bloomberg.

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