Walgreen Chairman and CEO Jeffrey Rein retires

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DEERFIELD — Drugstore chain Walgreen Co. said Friday Chairman and CEO Jeffrey Rein has retired from the company after 26 years.

Rein, 56, will be replaced as company chairman by Alan McNally, 62, lead director on Walgreen's board. McNally will also serve as acting CEO while the board searches for a permanent replacement. He joined the company's board in 1999 and previously served as CEO of Harris Bankcorp.

The company specified no reason for Rein's departure. He had been CEO since April 2006.

Some analysts speculated Rein may be leaving because of differences with the board of the company.

"Given's Mr. Rein's age (56) and relatively short tenure, we wouldn't guess this to have been voluntary on his part," SunTrust Robinson Humphrey analyst David Magee in a note to clients.

Magee said Rein made some good decisions, including getting the company into the specialty pharmacy business and paring back store growth.

But he said Walgreen's sales were soft in the past few quarters, and "outsiders" were unhappy with the way Walgreen went after Longs. The companies discussed a tie-up as early as 2007, but Longs accepted a buyout bid from CVS Caremark Corp. in August. Walgreen made a greater offer in September, but was unsuccessful in wooing Longs and withdrew its bid Wednesday.

"We understand that the company is evaluating a number of possible going forward strategies; perhaps a successor will be more successful at forging a single vision," he said.

Jefferies analyst Scott Mushkin said the company needs to reconsider its "disdain" for the pharmacy benefits management business and should make an effort to reduce prescription drug costs while further developing the specialty pharmacies.

Shares of Walgreen Co. fell $2.06, or 8.2 percent, to $23.22.

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AP Business Writer Matthew Perrone contributed to this report.

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