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It was just 3 weeks ago that RIL-Apollo was making a binding bid to the Wallgreens Boots Alliance, to purchase its Boots pharmacy chain.
Well, yesterday, Wallgreens announced that it was dropping the plan to sell the pharmacy chain.
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For the unversed, Walgreens Boots Alliance (Nasdaq: WBA) is Anglo-Swiss-American integrated healthcare, pharmacy, and retail leader serving millions of customers and patients every day, with a 170-year heritage of caring for communities. It serves customers in 9 different countries with its vast portfolio consisting of several brands: Walgreens, Boots, Duane Reade, the No7 Beauty Company, Benavides in Mexico, and Ahumada in Chile.
WBA planned to sell the Boots brand as Wall Street considered it to be a positive sign for the stock. The company's financials are in bad condition as the company has high debt and weak cash flows. The sale of the British brand Boots would allow the company to lower its debt and pursue growth initiatives for its American stores which yielded 82% sales and 90% income generation in the last two quarters.
The sale of the Boots brand was first reported in December 2021 with the company asking for a valuation of £7 billion. The sale had garnered the interest of CVC Capital, Bain Capital, TDS, billionaires Mohsin & Zuber Issa and RIL-Apollo. Of these parties, RIL-Apollo had made a binding offer valuing the brand at £5 billion.
However, the company stated yesterday that they were withdrawing their plan since they were not getting a fair valuation. The company blamed the dramatic and unexpected changes in global financial markets as the main reason while stating that the company would keep focusing on the profitability and growth of the company.
“As a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value of Boots,” Walgreens said in a statement.
The company also stated that it has strong fundamental values so it would continue to invest in the company to help it grow and realize its full potential.
The stock of WBA has been declining consistently since mid-January 2022 as it closed at $40.96 per share, down 2.92% in a single day. Yesterday's decline marked a 25.2% decline in the stock's price since the beginning of 2022.
Article by Aman Agarwal.
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