Bulls Bet on Walgreens Boots Shares Before Buyout News Broke

(Bloomberg) -- Equity bulls had been eyeing Walgreens Boots Alliance Inc. just before news broke Tuesday that the company is considering going private.

Trading of bullish options surged to a level not seen in two years Monday, amid the biggest two-day gain in the stock since 2014, data compiled by Bloomberg show. Calls betting that the shares would advance to at least $61 were the most traded -- they’ve been below that price since April.

Walgreens Boots climbed for a third day Tuesday, closing at $61.21, as people familiar with the matter said the retail pharmacy recently held informal talks with private-equity firms including KKR & Co. about taking the company private. Its bonds sank by the most ever.

The most-traded options on Monday were December $62.50 calls and November $61 calls, data compiled by Bloomberg show. A block of 1,336 of the latter contracts changed for 87 cents each. They were worth $1.87 apiece at Tuesday’s close.

Media representatives for Walgreens Boots didn’t immediately reply to a call and email asking for comment, outside of office hours.

To contact the reporter on this story: Cecile Vannucci in Hong Kong at cvannucci1@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Cormac Mullen, Joanna Ossinger

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