Australian pharma giant Sigma quits Boots takeover talks

Australian pharmacy giant Sigma has walked away from talks over a £7.5bn private takeover of Boots, renewing hopes that the high street pharmacy could float in London.

The Australian firm said on Monday that a deal with Boots would not meet its investment objectives, leaving just the billionaire Weston family in sales talks with the high street pharmacy.

Sycamore Partners, the private equity firm which owns Boots, has been in early talks with Sigma and the Westons since before Easter, it emerged last week. 

But Sigma’s exit leaves only the Westons in the running, with their Canadian operations – which owns grocery chain Loblaws and pharmacy business Shoppers Drug Mart – holding talks with the British firm.

Reports of Boots’ talks over a private sale dealt a blow to hopes that the retailer could launch a £7bn London listing, marking its return to the FTSE after it quit in 2007.

Sigma’s departure from sales talks, first reported by Reuters, would have grown the Australian pharmacy firm’s presence in the UK, as it eyes international expansion.

But it said on Monday: “Sigma has many opportunities for growth and is confident in its established growth strategy, with a primary focus on ​the Australian market.”

Shares in the Australian-listed healthcare firm jumped six per cent on the news it had quit talks, to 2.8 Australian dollars.

Sigma’s departure leaves only the Westons, the largest shareholders of FTSE 100 conglomerate Associated British Foods, in talks with Boots.

Sycamore Partners, which acquired Boots’s owner Walgreens Boots Alliance for $23.7bn last year, is still laying the groundwork for a potential London listing despite its sales talks.

This IPO, first rumoured in April, would offer a major boost for the London Stock Exchange, as policymakers attempt to end a recent drought of listings by loosening tax and regulation.

The London float would value Boots at around £7bn and would see the high street pharmacy return to the public market for the first time in nearly two decades.

The firm was previously listed in London as part of Alliance Boots, but became the first ever FTSE 100 company to be bought by a private equity firm in 2007.

Last week, Boots revealed its pre-tax profit jumped by 25 per cent to £337m in the year to August, ahead of its private takeover.

Retail sales jumped by nearly six per cent as revenue grew by three per cent to £7.5bn.

Boots is set to appoint former Currys boss Alex Baldock as its new chief executive later this year.

The firm was founded as a family herbal medicine shop in Nottingham in 1849. The pharmacy operates more than 1,800 stores across Britain.