Boots possibly in store for eight billion pound deal as bidding deadline looms

As the bidding application deadline for UK pharmacy chain Boots wraps today, reports have said the retailer could pocket an eight billion pound deal following potential interest from “deep-pocketed investors”.

The sale would dismantle the Walgreens Boots Alliance (WBA), which was established in 2014 following US drugstore group Walgreens’ acquisition of the British chain.

The auction process for Boots, which operates more than 2,000 stores and is valued at six to eight billion pounds, is being led by Goldman Sachs and is targeting investors with knowledge on revamping high street retailers, said a report by Reuters.

Interest from private equity firms and potential NHS partnerships

The publication, which cited two sources close to the issue at hand, has said private equity firm TDR Capital, the owner of supermarket chain Asda, is among those interested in the deal. According to its sources, the investment company could be interested in integrating Boots into Asda stores.

CD&R, which was also reportedly considering the purchase, has now allegedly backed out of the deal following the probing of its Morrisons takeover by a UK watchdog, which has prohibited the group from integrating the supermarket chain with other companies in its portfolio.

Sources also suggested the interest comes as private equity firms map out plans to strike partnership deals with the National Health Service (NHS), ultimately turning Boots’ stores into medical hubs.

News of the possible sale broke in January after a spokesperson for WBA said the company was undertaking a strategic review, with a particular focus on Boots and its own cosmetics brand No7.

WBA chief executive officer, Rosalind Brewer, confirmed the news during a presentation at the JPMorgan Annual Healthcare Conference, stating the review fell in line with the company’s renewed priorities and focus on US health care, adding that she expected the exploratory stage to move quickly.