Pharmacy retailer Walgreens Boots Alliance Inc. (WBA) has started the sale process of its UK-based pharmacy outlet Boots UK, with potential bids from private equity firms, according to Bloomberg. Shares closed down 1.4% at $49.76 on January 31.
Sale of Boots UK
Walgreens is considering selling its Boots UK Limited retail chain to suitable buyers. The company is said to be giving out preliminary information about the UK pharmacy chain to potential buyers. The latest entrant in the buyer’s list is U.S.-based private equity firm Sycamore Partners. The initial round of bids is expected in the coming weeks.
Bloomberg reported that Boots UK could be worth around $9.6 billion (£7 billion). If the buyout process does not attract much interest, Walgreens could also consider spinning off the firm in an initial public offering. Boots UK is a 172-year-old pharmacy chain and Walgreens acquired it during the period 2012 and 2014 through multiple transactions.
Boots UK has about 2,200 stores across Britain and smaller outlets in Ireland, Norway, the Netherlands, and Thailand and employs around 55,000 people. The sale is expected to include all these outlets, along with its optician business, and its own-brand beauty and personal care products business.
Other potential bidders include TDR Capital and the Issa brothers, Bain Capital, CVC Capital Partners, Advent International, and KKR & Co. Inc. (KKR)
Wall Streets’ Take
The Wall Street community has a Hold consensus rating on the WBA stock with 1 Buy, 6 Holds, and 1 Sell. The average Walgreens Boots Alliance price target of $55 implies 10.5% upside potential to current levels. Shares have gained 24.8% over the past year.
TipRanks’ Stock Investors tool shows that investor sentiment is currently Very Negative on Walgreens, with 8.4% of portfolios tracked by TipRanks, reducing their exposure to WBA stock over the past 30 days.
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