Longs Drug won't start sale talks with Walgreen

Longs said Walgreen "has not presented a clear roadmap to completion" of a deal, and is not willing to assume any risk that the deal is rejected or delayed by antitrust regulators.

Walgreen has offered to buy Longs for $75 per share, or $2.8 billion. However, Longs has accepted CVS Caremark Corp.'s lower bid of $71.50 per share, or $2.7 billion.

Longs' shares rose $1.64, or 2.2 percent, to close at $76.15 on Tuesday, indicating investors believe the company is worth even more than Walgreen has bid for it.

In a statement, Longs said the CVS bid--which has already been approved by regulators--is more likely to be completed. It also said Walgreen has not explained how it would pay for the buyout, and noted that Walgreen's declaration of interest is nonbinding and depends on the results of due diligence by Walgreen, meaning the company could walk away from negotiations even if Longs accepts.

Deerfield, Ill.-based Walgreen did not return calls seeking comment.