Walgreens Dips After $595M Settlement Over COVID Test Dispute With Everly/PWN, But Retail Is Unfazed

Shares of Walgreens Boots Alliance slipped 3% on Wednesday after the company reportedly reached a settlement involving the payment of $595 million to Everly Health Solutions, in connection to the “ordering and oversight” of COVID testing, but retail sentiment stayed upbeat.

The company’s stock was marginally up in after-hours trading.

According to media reports, Walgreens allegedly breached an agreement it had with Everly Health Solutions, formerly known as PWNHealth when it in-sourced certain enabling services previously performed by Everly/PWN related to the ordering and oversight of COVID testing.

Everly also alleged fraudulent inducement, misappropriation, and improper use of PWN's mark, Fly reported.

Under the terms of the settlement agreement, Walgreens will pay Everly $595 million, payable within two business days.

The settlement agreement will prevent the “continued accrual of post-award interest on the arbitration award and the cost and uncertainty of continued litigation,” according to the report.

Everly Health Solutions, formerly known as PWNHealth LLC, initiated an arbitration two years ago alleging that an agreement between Everly/PWN and the Walgrees was exclusive, The Fly reported.

Walgreens had disputed the allegations and the arbitration award as it “believed it is in contravention of a contractual cap on damages in the agreement, which limits damages to $79 million.” On Feb. 10, a federal court in Delaware upheld the arbitration award by granting Everly’s motion to confirm the award.

Sentiment on Stocktwits continues to be ‘bullish’ compared to a week ago. Message volume rose to ‘high’ from ‘normal.’

One bullish commenter suggested the company seemed eager to clear any legal hurdles before its buyout.

Walgreens was reportedly in talks with private equity firm, Sycamore Partners, for a potential go-private transaction that has been rumored to be likely “dead” by certain analysts and media outlets.

Walgreens employs about 312,000 people across eight countries including the US. Its consumer brands include Walgreens, Boots, Duane Reade, No7 Beauty Company and Benavides.  It has over 12,500 stores across the U.S., Europe and Latin America.

Walgreens shares are up 18.3% year-to-date.

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