Boots owner revisits talks on selling off €8bn pharmacy chain

Sale process was scrapped last year after company failed to secure the desired valuation for the business

Boots has about 80 outlets in the Republic.

The owner of Boots is reviving discussions on a potential exit from the pharmacy chain, nearly 18 months after a sale process was scrapped, people with knowledge of the matter said.

Walgreens Boots Alliance has been holding early talks about ways to separate Boots, which could be valued at about £7bn (€8bn), the sources said, and is studying a London initial public offering of its shares as one possibility.

A Boots shares offering would be a big boost to the London market, which has been hit by a steady flow of companies opting to list elsewhere. 

Any process would only start next year at the earliest, the source said. Walgreens reached a deal in November to offload Boots pension risks to Legal & General Group, removing a stumbling block that had complicated previous efforts to divest the business. 

Walgreens invited bids for Boots last year as it sought to hone its focus on North America, where it has been adding more healthcare services. It abandoned the effort in June 2022 after failing to secure the desired valuation for the business amid a turbulent credit market.

During that last process, Indian billionaire Mukesh Ambani’s Reliance Industries had teamed up with Apollo Global Management on a bid for Boots. 

They were competing with a separate consortium backed by TDR Capital and Britain’s billionaire Issa brothers, people with knowledge of the matter said at the time.

Walgreens could also opt to invite fresh offers for Boots, though higher interest rates would make it more difficult for private equity firms to pay top dollar. Deliberations are still at a preliminary stage, and there is no certainty they will lead to a transaction.

A representative for Walgreens declined to comment. 

Walgreens is in cost-cutting mode and has brought in new chief executive Tim Wentworth to attempt to turn around the business. 

Earlier this week, Walgreens had its senior unsecured credit rating cut to junk by Moody’s Investors Service, which cited the drugstore chain’s high debt relative to earnings. 

Boots has about 80 outlets in the Republic as well as a large number in the North and runs a sprawling network of more than 2,000 stores in Britain, as well as private-label brands like No7 Beauty Co and operations in a smattering of other countries.

Walgreens said earlier this year it would close 300 Boots stores in the UK, mainly those in close proximity to other outlets, as it seeks to focus investment on its best performing locations. 

• Bloomberg