A large US pension adviser has written to US regulators asking them to investigate Illinois-based retailer Walgreens plans to move its tax base from the US to Switzerland as part of its takeover of Alliance Boots.
The CtW Investment Group, which represents union pension funds holding $250bn (pounds 146bn) in investments, has written to the Securities and Exchange Commission asking them to investigate an apparent violation of a rule designed to prevent disclosure of material inside information to favoured groups.
According to the complaint, Walgreens executives held private meetings with analysts and hedge funds in which they discussed potentially restructuring the planned acquisition to allow for a so-called tax inversion that would allow it to move its headquarters and escape the US's far higher corporate tax rate.
Barclays analysts have estimated the move would save the company $783m in the first year after the inversion.
CtW's complaint focuses on two off-the-record meetings at which the Financial Times reported Walgreens management held "constructive" talks with hedge funds and analysts. Walgreen's stock price rose significantly afterwards.
"We seek to . . . ensure all pertinent information regarding Walgreens is broadly disclosed and disseminated on a timely basis to the marketplace and all shareholders," said a Walgreens spokesman.
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