Apollo and Reliance Industries join forces to make binding bid of up to £6bn for chemist Boots
Private equity firm Apollo and Indian conglomerate Reliance Industries have made a binding bid for high street chemist Boots, it has been reported.
According to the Financial Times, the offer values the company at between £5bn and £6bn, two sources familiar with the deal told the newspaper.
US owner Walgreens Boots Alliance had been looking to shift the firm for around £7bn.
However earlier this year, a consortium made up of private equity titans CVC and Bain withdrew from the race after admitting they would only be willing to cough up £4bn for it.
According to the FT’s sources, the deal proposed by Apollo and Mukesh Ambani’s firm means that WBA would keep a minority stake.
Chris Beckett, head of equity research at Quilter Cheviot: “The news that Walgreens appears to have found a buyer for Boots brings to an end some uncertainty for the company.”
Beckett suggested that the lower price offering could be “a consequence of recent market volatility.”
“Clearly Walgreens wants to move now and get on with its growth plans, rather than hold out for a better price,” he added. “That said, the speculation suggests it would keep a minority stake in Boots, allowing it to keep its foothold in the international pharmaceutical market, particularly given Boots’ footprint. “
Suitors who have thrown their hat in the ring and may potentially make a bid are thought to include private equity firms Asda owners TDR Capital and former Ted Baker suitor Sycamore.
The FT reported on Thursday that the billionaire brothers Mohsin and Zuber Issa, alongside TDR Capital, have put forward an initial non-binding bid. However, the newspaper said it was not clear whether they will make a formal offer.