Boot sale on hold while Issa brothers and TDR reconsider


A consortium backed by billionaire Issa brothers is considering dropping the bid for the international arm of Walgreens Boots Alliance Inc. over disagreements over the price, people familiar with the matter said.

The Issas, who bid alongside TDR Capital, were reluctant to increase their bid for Boots drugstore chain when asked by Walgreens and are now considering walking away, the people said.

Walgreens shares trimmed earlier gains and closed down 1.4 percent in New York on Thursday.

The situation is fluid, and the investor group could still get back in the running if it can reach a price compromise with Walgreens, it said.

The US company has a valuation of around $7 billion for Boots.

In auction situations, potential buyers sometimes leave the negotiating table to gain a tactical advantage.

The Issa-TDR group was one of the two main contenders remaining in the competition. They bid for Boots through Asda Group Ltd., the British grocery chain they jointly own.

A consortium of Reliance Industries Ltd. of Indian billionaire Mukesh Ambani and Apollo Global Management Inc. is the other serious party still in the running.

That group was still working on the funding in recent days and had not yet submitted a bid for the second round, Bloomberg News reported this week.

Sycamore Partners had expressed an interest in Boots earlier in the race, people with knowledge of the matter said.

Representatives of the Issa-TDR consortium and Walgreens declined to comment.

The boat sale has become a litmus test for deals in the UK as credit markets become increasingly vulnerable.

The favorable financing conditions that supported a number of debt-fueled takeovers by British companies last year are largely over.

Banks that funded the private equity buyout of Wm Morrison Supermarkets Plc had to sell some of the debt at a deep discount. Boot sale on hold while Issa brothers and TDR reconsider

Fry Electronics Team

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