Walgreens faces losing billions on Boots sale as former suitors CVC and Bain suggest lower price tag
The US pharmacy giant behind Boots could lose out on billions after the chemist was valued much lower than initially hoped.
Walgreens has been eyeing a £7bn sale of the UK company, however a consortium involving private equity firms CVC and Bain withdrew from takeover talks in March.
According to The Telegraph, the two former suitors had suggested they would only pay a price tag of £4bn for Boots.
Walgreens snapped up Boots in 2014 in an acquisition worth £9bn, but is now hoping to sell for £7bn after previously selling the company’s wholesale arm.
Citing City sources, the newspaper said the discount was significant as CVC’s UK chief Dominic Murphy is a Walgreens board member and has had more than a decade of experience working with Boots.
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 billionaire brothers behind Asda, Zuber and Mohsin Issa, are continuing to look at buying Boots, alongside Apollo Global Management and Sycamore Capital.
US investment giant Apollo is thought to be a major frontrunner in the bidding race, with Sky News reporting it has lined up banks to finance a £6bn takeover offer for Boots.
The New York-based firm was in talks with Bank of America, Credit Suisse and Royal Bank of Canada to support the bid, according to a Sky News report last month.