The decision follows concerns that the war in Ukraine might make it harder for buyers to raise financing, the newspaper reported yesterday (April 3).
To assist with the sale of its UK arm – which could generate between £6 billion and £10bn, according to reports in The Times, Sky News and The Guardian – Walgreens Boots Alliance will shoulder between 15% and 30% of Boots UK, according to The Times.
The newspaper added that this move might also help Ornella Barra – the current chief operating officer at Walgreens Boots Alliance, with responsibility for the international segment – to take a seat on the board of the new owners.
A Boots UK spokesperson was unable to share further information when approached by C+D today (April 4).
Deal expected for early May
Walgreens Boots Alliance is expected to decide on its preferred bidder by Easter, while a deal should be struck by May, according to The Times.
Rumours about Boots' parent company’s intentions to “explore” a sale of its UK arm first emerged in December last year.
In March, Sky News reported that US private equity firm Bain Capital and UK-based CVC Capital – who were originally the reported frontrunners to scoop the health and beauty giant in a joint bid – had pulled out of the running, “largely down to the price expectations of the chain’s owner”.
Walgreens Boots Alliance started meeting with potential bidders about two weeks ago, The Times reported on March 20.
The newspaper said at the time that, among the interested parties, American private equity firms Apollo and Sycamore Partners had already submitted non-binding bids. They compete against British private equity firm TDR Capital and the Issa Brothers, owners of supermarket giant Asda, takeaway chain Leon, and petrol forecourt business the EG Group.
Read more: Boots UK sale: speculation and potential market impact – where are we now?
Boots UK sales will not recover until 2023
Walgreens Boots Alliance chief financial officer James Kehoe told investors last week that Boots UK’s sales will not fully bounce back until “fiscal year 2023”.
However, he added that Boots UK’s overall sales advanced 15.2% compared with the same quarter last year and pharmacy sales saw a 3.6% increase in the same period.
The Times also reported yesterday that Boots UK’s parent is raising more than £80 million through the sale and leasing of its distribution centre in Burton-on-Trent, Staffordshire – which is currently under offer.