Bain and CVC abandon £6bn pursuit of high street chemist Boots

One of the leading contenders to buy Boots, the high street chemist, in a £6bn deal has abandoned its pursuit in a move that could pave the way for a takeover by Asda.

Sky News has learnt that a consortium comprising Bain Capital and CVC Capital Partners decided against submitting an offer for Boots last week.

The surprise decision came after months of work undertaken by Bain and the involvement of Dominic Murphy, a CVC partner who has been an instrumental figure in Boots’ ownership over the last 15 years.


City sources said the consortium’s decision not to bid was largely down to the price expectations of the chain’s owner, Walgreens Boots Alliance (WBA) – where Mr Murphy remains on the board.

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The withdrawal of Bain and CVC is said to leave fewer than a handful of bidders for Boots, with Asda, Apollo Global Management and Sycamore Capital said to be among those who remain interested.

Indicative offers worth more than £6bn are understood to have been submitted last week.

Sky News revealed several days ago that bidders for Boots were grappling with options for tackling huge pension liabilities guaranteed by WBA.

At approximately £8bn, Boots’ pension scheme is one of the largest private retirement funds in the UK.

Although it is well-funded, private equity insiders say that the Boots pension trustees are expected to seek substantial additional funding as part of any leveraged buyout of the business.

Boots trades from more than 2000 stores and employs over 50,000 people, making it one of the UK’s biggest private sector employers.

The sale process is being run by Goldman Sachs.

For Stefano Pessina, the WBA chairman, a decision to sell Boots would mark the final chapter of his involvement with one of Britain’s best-known companies.

The Italian octogenarian engineered the merger of Boots and Alliance Unichem, a drug wholesaler, in 2006, with the buyout firm KKR acquiring the combined group in an £11bn deal the following year.

In 2012, Walgreens acquired a 45pc stake in Alliance Boots, completing its buyout of the business two years later.

Like many retailers, Boots has had a turbulent pandemic, announcing 4000 job cuts in 2020 as a consequence of a restructuring of its Nottingham head office and store management teams.

It has also been embroiled in rows with landlords about delayed rent payments.

Shortly before the pandemic, Boots earmarked about 200 of its UK stores for closure, a reflection of changing shopping habits.

The chain’s heritage dates back to John Boot opening a herbal remedies store in Nottingham in 1849.

It opened its 1000th UK store in 1933.

Bain has been contacted for comment, while CVC declined to comment on Tuesday.