The race to acquire Boots, the leading health and beauty chain in the UK, has taken some interesting twists and turns in recent days. A major consortium consisting of Bain Capital and CVC Capital has decided to withdraw from the bidding process, while the owners of Asda, another prominent player, are still in contention.

The withdrawal of the Bain Capital-CVC Capital consortium came as a surprise, considering one of the partners, Dominic Murphy, has a strong association with Boots. Sky News revealed that the decision to back out was due to the high price demanded by Walgreens Boots Alliance, the current owner of Boots. Only a few contenders now remain interested in acquiring the chain, including Asda, Apollo Global Management, and Sycamore Capital. All of these parties have reportedly submitted indicative offers exceeding £6 billion.

No official statements have been made by any of the involved parties regarding their involvement in the bidding process. Alongside the purchase price, the sizeable £8 billion Boots pension scheme is also a crucial factor to consider. Although the scheme is well funded, trustees may seek additional funding if a leveraged buyout of the company occurs.

Boots is a major player in the UK retail sector, with over 50,000 employees and more than 2,000 stores nationwide. The company has faced challenges due to the COVID-19 pandemic but has experienced a recovery in recent periods.

The potential acquisition of Boots by private equity buyers raises questions about the future direction of the business. If Asda were to succeed in acquiring Boots, it would be interesting to see how they would manage the transition. Similar to the Sainsbury’s acquisition of Argos, it’s possible that some Boots branches could close, while others might reopen within Asda stores.

The outcome of the auction for Boots remains uncertain, but the involvement of prominent players like Asda, Apollo Global Management, and Sycamore Capital indicates that the battle for this iconic health and beauty chain is far from over. Market watchers and industry insiders are eagerly awaiting the final decision and its implications for Boots and the UK retail landscape.

Useful Links:
BBC: Future of UK health and beauty chain Boots in doubt amid sale talks
Reuters: U.S. hedge fund Sycamore cements UK retail interest with Asda, Aventia