Boots eyes £7.5bn sale in blow to hopes of London IPO
The owners of Boots are weighing up a £7.5bn sale which would dash hopes of a London listing and deal another blow to the UK’s stock exchange.
Sycamore Partners, the private equity firm which bought Boots’ parent company for $23.7bn last year, has been in talks with a number of suitors since before Easter.
The owners of the high street chemists are in talks with the billionaire Weston family and Sigma Healthcare, an Australian pharmaceutical group, the Financial Times first reported.
It is understood that these sale talks are in their early stages and the door is still open for a potential London float.
American pharmacy Walgreens acquired a 45 per cent stake in Boots in 2012 and later made the firm a subsidiary of the Walgreens Boots Alliance.
Sycamore, which acquired Walgreens Boots Alliance for $23.7bn last year, has reportedly been in talks with the Canadian branch of the Weston family, the billionaires behind Associated British Foods.
The Westons’ Canadian operations include the grocery chain Loblaws and pharmacy business Shoppers Drug Mart, which are owned through the family’s Whittington Investments firm.
Sycamore is reportedly also facing interest from Australian-listed Sigma Healthcare, which is valued at £18bn and is further international expansion.
A private sale would scupper previous hopes that Boots would return to the London stock exchange in a blockbuster Initial Public Offering (IPO).
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 could have valued Boots at around £7bn, and is reportedly the option still preferred by the chemists’ owners.
Boots was founded as a family herbal medicine shop in Nottingham in 1849. The pharmacy operates more than 1,800 stores across Britain.
On Tuesday, the company 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.
The firm has previously been 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.
Former Currys boss Alex Baldock is set to become Boots’ new chief executive later this year, in a move first reported by Sky News.
Shares in Currys sank by 11 per cent after Baldock’s departure from the tech retailer was announced in March, leaving behind a broadly praised turnaround of the business.