Walgreen withdraws offer for Longs

The Walgreen Co.'s unsolicited $2.8 billion offer to buy out Longs Drug Stores Corp. has been withdrawn.

That should leave the path clear for Walnut Creek-based Longs (NYSE: LDG) to be purchased by one of Walgreen's biggest rivals, CVS Caremark Corp. (NYSE: CVS) of Woonsocket, R.I.

Jeffrey Rein, chairman and CEO of Deerfield, Ill.-based Walgreen (NYSE: WAG) said the refusal of Longs officials to "engage in a constructive dialogue" about the offer led to the withdrawal. He said "it would not be in the best interests of Walgreen shareholders, customers or employees to allow this situation to remain unresolved for an extended period of time.???

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CVS has offered to pay $71.50 per share for Longs, or a total of $2.7 billion for the retailer with more than 500 locations in California, Nevada and Hawaii. After the CVS purchase of Longs cleared regulatory hurdles, Walgreen made an unsolicited offer of $75 per share for Longs last month.

But members of the Longs board of directors said after examining the larger offer, they would not consider it, saying there were no assurances of regulatory approval.