London listing of Boots canceled by American parent

Boots, owned by the American pharmacy chain CVS, has canceled plans to list the high-street retailer on the London stock exchange. This will deprive the UK of an eagerly anticipated listing.

Walgreens Boots Alliance has ceased to actively explore an initial public offering for Boots. Bloomberg reported that the company is instead in discussions with private equity firms and other potential buyers about a possible sale.

The New York-listed Walgreens with its more than 330,000 employees and 12,500 retail stores has seen a steep drop in market value over the last year due to high debts incurred by an aggressive acquisition spree. The company posted operating losses of $13.2 Billion in the first half of its financial year.

Walgreens considered selling boots by 2022 but later canceled plans citing “unexpected and drastic changes” in the market. The Issa Brothers, owners of Asda and Reliance Industries in India, Apollo, a private equity group and a consortium consisting of Apollo’s rivals CVC, Bain Capital and Apollo were among the potential buyers at the time.

Boots, Britain’s largest high-street chemist with around 2,000 outlets, is the country’s leading chemist. Recent filings at Companies House for three UK subsidiaries show that the company reported a 42.3% increase in profits before tax to £237.6million for the year ending last August, thanks to higher margins. Brands such as Liz Earle and Soap & Glory have boosted sales, along with Boots no7. Boots.com accounts for about a fifth (25%) of Boots’s UK retail sales.

In recent years there has been a lack of IPOs in Britain, and a number of companies have moved their listings to the US for higher valuations and generous remunerations for executives. Peel Hunt, a City broker, predicted an IPO rebound in London in a Monday note, citing strong UK equity market volumes and heightened M&A activity. Analysts said that this highlights the value of the UK market.

Walgreens spokesperson said that they do not comment on rumours and speculation.

“Walgreens Boots Alliance conducts a strategic review to ensure long-term shareholder value.” “All options are on table.”

Post Disclaimer

The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.

This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.

The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.