Walgreens contacts potential buyers for Boots chain

Boots could be valued at about £7bn (€8.96bn) in an exit, with one possibility being an initial public offering in London. Photo: Simon Dawson/Bloomberg

US retail giant Walgreens is reaching out to potential buyers of the £7bn (€8.96bn) Boots pharmacy chain, according to people familiar with the matter.

The Illinois-based company is working with advisers to hold early-stage discussions with would-be bidders, said the people, who asked not to be identified because the matter is confidential. No formal sale process has begun, they said.

A Walgreens representative declined to comment. The stock jumped in trading in New York after Bloomberg reported that the company was contacting possible buyers.

The company last year revived discussions on a potential exit from the UK chain, almost 18 months after scrapping a planned sale, Bloomberg reported in December. Boots could be valued at about £7bn (€8.96bn) in an exit, with one possibility being an initial public offering in London.

Walgreens' shares have plunged 42% in the past year as the company struggled to restore growth. This year Walgreens cut its dividend by half and lowered its profit outlook, citing reduced consumer spending on non-essential items.

A sale would undo a blockbuster trans-Atlantic merger that took place in stages beginning more than a decade ago.

Boots has around 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 that it will 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