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Boots takeover price tag in question as former bidders £4 billion valuation revealed

Camilla Rydzek
11 April 2022

The price tag of chemist retail chain Boots UK is in question following revelations that former bidders CVC and Bain Capital valued the retailer at £4 billion, as opposed to its £7 billion asking price.

CVC and Bain Capital had never made a formal offer for Boots and had left negotiations in March, leaving the Issa brothers, owners of ASDA, as frontrunners for the acquisition of the business. They are said to be keen to add Boots' 2,000 strong store portfolio to its own operations.

CVC and Bain Capital had been regarded as having an advantage due to CVC's Dominic Murphy working with Boots for 15 years and having also sat on the board of Walgreens.

Walgreens purchased Boots in a deal worth £9 billion in 2014, and after selling the chemist chain's wholesale arm last year valued it at £7 billion. The business had a potential valuation of £10 billion at the very start of the sale process in December 2021.

Alongside the Issa brothers, Apollo Global Management and Sycamore Capital are still in the running to buy the chemist retail chain.

The New York-based investment giant Apollo reportedly began talks with banks in late March to provide debt funding for a £6 billion takeover of Boots.

Sycamore Capital's £6 billion takeover bid had previously been put into question as it was revealed that it had made two takeover offers for fashion brand Ted Baker - both of which have been rejected. Ted Baker put itself up for sale last week following a third unsolicited takeover move. 

Walgreens announced last week that it was willing to retain a stake of up to 30% in Boots amid concerns over the rising costs of borrowing, which would be required to complete the takeover of Boots.

Boots has reported that in its second quarter ending 28 February 2022, UK sales were up 15.2%, with retail sales increasing by 22%. Its digital sales had also seen a 60% boost, with online sales accounting for 15% of its retail sales.

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