Boots’ owner ‘tries again’ with £7bn sale plan

The owner of Nottingham-based pharmacy giant Boots is stepping up efforts to find someone to buy the brand – and has placed a £7bn price tag on the retailer.

Walgreens Boots Alliance (WBA) is teaming up with advisors to start discussions with interested buyers, says Bloomberg.

WBA is also mulling floating Boots on the London Stock Exchange.

In 2022, Walgreens tried to sell the 172-year-old pharmacy chain, but gave up when potential buyers didn’t meet the asking price.

A joint offer from private equity heavyweights Bain Capital and CVC Capital Partners and a £5bn bid by Apollo Global Management and Reliance Industries came to nothing in January 2022 after both failed to meet Walgreens’ asking price of £7bn.

Last November, Boots sold its pension plan to Legal & General for £4.8bn.

In 2023, it was also said that the retailer would close 300 stores in a bid to “evolve” its estate, reducing Boots’ portfolio from around 2,200 to 1,900 shops. 

Nick Drewe, the retail and trends expert at online discounts platform, Wethrift, said: “Boots is a multigenerational retailer that is significant to our local high street. After announcing the selling of their pension scheme for £4.8 billion last November, evidently, the guarantee Walgreens provided to the scheme was dissolved. This, in turn, removed a deterrent to private equity firms previously eyeing up Boots to be bought.

“Once the pension scheme was sold, the owners insinuated they were seeking new buyers amidst the market challenges. But considering the condition of the retail market at the time, the offer was revoked.

“As Walgreen opens up the discussion of selling Boots, they are also looking to eventually shut down 300 stores this year, in a move to consolidate business. The high-street retailer currently has 2,200 stores across the UK, employing around 55,000 people, and is looking to cut down to 1,990 locations.

“The influence of Covid-19 and Brexit on the UK retail market has seen many big brands go into administration or force them to reassess their ongoing business and marketing strategy – including closing stores, similar to Boots, to keep afloat.

“Ultimately, the cost of living crisis, overall, has seen people less willing to spend money within the retail sector and cut back on ‘luxury’ items.

“Whilst inflation is at the lowest it’s been in over two years, businesses and customers are still feeling the individual effects of both ongoing issues that are being witnessed not only on a UK scale, but worldwide. Because of this, the market has become unstable for brands of all shapes and sizes, meaning these measures are necessary as a viable way for Boots to stay afloat.

“The potential closing of 300 stores puts many jobs at risk. However, it isn’t all doom and gloom. The current owners are looking for ways to transform Boots to survive the death of the high street. As well as increasing their market share in premium beauty, the potential buying of Boots could result in a revival for the brand.

“New ownership can come with a range of benefits. Changes to employee benefits, work culture, policies and procedures all have the potential to improve the current environment for staff.

“It can also reform the business’ success through amending their overall business strategy and increasing turnover, which, in turn, promises job security for employees.

“Another reason the current owners are looking to sell Boots is because of the pressures to focus solely on their US side of business. By seeking new owners that can invest more time and energy into the brand, it can strengthen their high-street presence and increase their market share.”

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