Walgreens Contacts Potential Buyers For Boots UK Chain: Report

By Reuters
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Walgreens Contacts Potential Buyers For Boots UK Chain: Report

Walgreens Boots Alliance is in the process of contacting potential buyers to sell its UK-based Boots drugstore chain in a second attempt at separating the unit, Bloomberg News has reported.

The company is working with advisers to conduct preliminary discussions with prospective bidders for the unit, worth about £7 billion (€8.1 billion), the report stated, citing people familiar with the development.

Walgreens declined to respond to a Reuters request for comment.

"From a strategic perspective, this makes sense to us as it would enable Walgreens to focus on its core US Retail Pharmacy operations while also managing the US Healthcare business, Leerink Partners analyst Michael Cherny said in a note.

In 2022, Walgreens had scrapped preliminary plans to sell the unit. However, it revived discussions on separating Boots, including the possibility of an initial public offering in London, according to a Bloomberg report late last year.


Profit Forecast

In March of this year, Walgreens Boots Alliance cut the higher end of its profit forecast for fiscal-year 2024, citing economic challenges for its retail operations, and took a $5.8-billion (€5.4 billion) impairment related to its VillageMD business.

On an adjusted basis, Walgreens reported earnings of $1.20 per share for in the second quarter, compared with analysts' average estimate of 82 cents per share, according to LSEG data.

Comparable retail sales at Boots UK increased 5.9% year-on-year during the quarter as the business witnessed growth across all categories and increase in total retail market share.

The company said it expects an adjusted profit of $3.20 to $3.35 per share for its financial year ending 31 August, compared to the $3.20 to $3.50 per share range it gave in January.

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