Pharmacy and beauty chain Boots is in discussions with an Australian rival and the billionaire Weston family over a potential £7.5 billion sale, just over a year after being acquired by private equity firm Sycamore Partners.
Sigma Healthcare confirms preliminary talks
Australian pharmacy group Sigma Healthcare confirmed on Wednesday that it has held “preliminary discussions” over a takeover of Boots. However, the company stressed to shareholders that there is “no certainty” any transaction will take place.
The announcement followed a report by the Financial Times suggesting that the UK-based pharmacy and beauty chain could opt for a 10 billion US dollar (£7.5 billion) sale rather than a stock market listing.
Weston family also in talks
It is understood that Boots has also held talks with the Canadian branch of the billionaire Weston family, which owns the majority of grocery chain Loblaws. The Weston family’s British side is the majority owner of Primark through its parent firm Associated British Foods, which also owns grocery brands including Twinings and Ryvita.
Discussions with both potential suitors are at an early stage, and no deal is guaranteed.
Background of Boots ownership
The potential sale comes only a year after Boots was snapped up by private equity firm Sycamore Partners, following the US investment giant's acquisition of parent firm Walgreens Boots Alliance for 23.7 billion US dollars (£17.7 billion). In August last year, Sycamore split off Boots from the US operations.
The new UK-based Boots business includes Boots UK and Ireland, Boots opticians, No7 Beauty company, and pharmacies in Thailand, Mexico, and Germany.
IPO still a possibility
It is understood that Sycamore is still considering a potential initial public offering (IPO) for Boots on the London stock market. However, a private sale would deal a fresh blow to the London Stock Exchange amid a dearth of new major listings in recent years.
