Boat auction halted as debt costs rise for private equity bidders


The owner of the Boots pharmacy business has scrapped a plan to sell the chain, saying that due to the turmoil in global financial markets, no third party was able to come up with a decent offer.

The algreens Boots Alliance move to call off the sale comes as private equity bidders Apollo Global and TDR faced headwinds in raising financing for the deal, multiple sources said.

Due to the difficult market conditions, the banks were cautious about taking on large parts of the financing.

Boots was originally valued at up to £8 billion (€9.26 billion) with the auction process led by Goldman Sachs, sources said in February.

Global economic uncertainty and rising inflation have prompted interest rates to rise as central banks rushed into action in the most widespread monetary tightening in more than two decades, making transactions more expensive and less accessible to finance.

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Walgreens had put its boating business up for sale after announcing a strategic review in January as the second-largest US pharmacy chain renewed its focus on home health care.

The company said the decision to retain Boots and No7 Beauty Company was also underpinned by their continued strong performance.

Brokerage firm Evercore ISI said the announcement came as no surprise, noting that it likely came as a disappointment to the management team, who had hoped to refocus the company on its US pharmacy and healthcare businesses.

“We view a potential future sale as likely within the next several years as the macro environment becomes more stable,” Evercore said in its statement.

Boots’ 173-year-old business includes stores in Ireland and 2,200 stores in the UK, including pharmacies, health and beauty shops. Boat auction halted as debt costs rise for private equity bidders

Fry Electronics Team

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