Britain’s billionaire Isa Bhai and Indian tycoon Mukesh Ambani are preparing to face off in the final battle for the Boots drugstore chain, one of the most recognizable names on the UK’s High Street. After submitting the highest bid in the first round, it is being seen as a team to defeat Issus before next week’s deadline for proposals, sources close to the matter said. The pair are going against Ambani, who is working on a bid together with buyout firm Apollo Global Management Inc.
Bidders are now taking on the size of Boots’ billion-dollar pension guarantee – which they have to take – because they understand how much they can pay for the business, people say. They are working around the clock to finance a tough market, which has become increasingly difficult due to the war in Ukraine, rising inflation and rising interest rates, according to the people.
There’s a lot to choose from, and after chain owner Walgreens Boots Alliance Inc.
A deal would fit well with Isas’ empire-building ambitions. In recent years, they have moved into an acquisition spree that has transformed their parent company EG Group into a global gas station and convenience store colossus. They are UK supermarket operator Asda Group Ltd. And Leon quickly snatched the chain from the casual restaurant.
The brothers, who are running Boots together with TDR Capital, seem to have found a clear solution to the financing problem: they are considering selling some assets in the supermarket chain to help raise more debt and finance the acquisition in Asda, wise men said this month. Dr.
The rise of Ambani, first published by Bloomberg News in April, promises to keep the nation competitive. Apollo has been known to be wary of overpayments in the deal, forcing it to lose auctions to British companies such as Asda and packaging firm RPC Group Plc. Teaming up with India’s second richest man could give it even more firepower: Ambani is an experienced operator keen to expand the retail arm of his conglomerate Reliance Industries Limited.
An outstanding question is how close Walgreens will be able to get his asking price of 7 billion pounds (8.5 billion). The bidders put the price at around 5 5 billion, although it is possible that they will increase their bids after due diligence, people said. The international drugstore sold by Walgreens – the main part of which is the UK boot chain – also includes scattering of retail activities elsewhere and attractive private-label brands such as No7 Beauty Co.
Retailer-centric private equity firm Sycamore Partners has also been claimed as one of the remaining suitors. Walgreens and representatives of the bidders declined to comment.
As the credit market becomes increasingly fragile, the sale of boots for dealing in the UK has emerged as a litmus test. The easing of financing conditions that last year supported a series of debt-fuel takeovers by British companies is largely over. In fact, the banks that financed the private equity buyout of WM Morrison Supermarket Plc had to sell off some of their loans and are now facing losses, Bloomberg News reports.
The one that will come up, the hard work will just start. Boots has an extensive network of over 2,200 stores across the UK, many of which need to be spruced up. Demand for this specialty has grown significantly as a result of recent corporate scandals.
There are also costs involved in dealing with the crisis of life. UK retailers have warned of a “cloud on the horizon” because of a sharp decline in sales as higher prices reduce the ability to spend.