Walgreens Boots Alliance, the American owner of Boots UK, could risk losing billions after a private equity firm interested in buying its UK high street pharmacy chain valued the retailer at a steep discount, The Telegraph reported on Monday (April 11).
“Buyout funds CVC and Bain indicated that they were willing to pay just £4bn for the business,” the newspaper said, adding that “the consortium bowed out of the running” in March.
The US retail giant Walgreens, which acquired Boots in 2014 for £9bn, has put a £7bn price tag on the UK pharmacy retail chain after selling its wholesale arm, Alliance Healthcare, last year.
Citing city sources, the newspaper said the low valuation of the pharmacy multiple was “significant” because CVC’s UK operations were led by Dominic Murphy, a Walgreens board member involved with Boots for 15 years.
“He (Murphy) knows where the bodies are buried,” the newspaper quoted one City source as stating. A spokesperson for Boots confirmed that CVC and Bain never lodged a formal offer for the company.
The Issa brothers, the new owners of Asda, are reportedly eyeing up Boots as their latest big acquisition. Other groups interested in buying the pharmacy chain include Apollo Global Management and Sycamore Capital.
Boots UK has more than 2,000 stores and employs 50,000 people.