Boots shortlists potential buyers

British retailer Boots has lined up a shortlist of six in the £1.2bn auction of its Nurofen-to-Clearasil business, it was reported today.

GlaxoSmithKline, household products group Reckitt Benckiser and US healthcare giants Pfizer and Johnson & Johnson are among the firms in the frame to land Boots Healthcare International, the Sunday Telegraph said.

Boots chief executive Richard Baker put the division up for sale in April as the Nottingham-based company looks to focus on turning around its core high street business, which features more than 1,400 stores.

The report said a final decision on the business, which makes Nurofen, Clearasil and Strepsils, was expected to be made at the end of next month.

Swiss pharmaceuticals company Novartis and German healthcare group Bayer are also said to be interested in the business, which has grown profits to more than £80m from £50m four years ago.

Despite the growth, Boots believes consolidation in the over-the-counter medicines market means its future is better placed outside the group.

Around 10 companies, including private equity firms, are said to have lodged first round bids by the deadline of August 3.

But trade buyers are seen as the front-runners for the business as they would be able to squeeze out costs by integrating BHI with their existing operations.

One estimate said a company like Reckitt, which owns the Lemsip and Disprin brands, could save as much as £60m per year over the next 10 years just from closing BHI’s offices in Nottingham.