Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Nottingham Post
Nottingham Post
National
Jack Thurlow

Asda owners may be on brink of backing out of bid for Boots over price disagreement

The owners of Asda could be on the brink of withdrawing their bid for Boots over a disagreement on price. The Issa brothers, who are teaming up with private equity firm TDR Capital to buy Boots, are reportedly reconsidering their bid after Walgreen - the owner of the pharmacy chain - asked for more money.

This would be a huge blow to Walgreens who were hoping to drum up interest from other competitors in the build up to the sale. The Issas' consortium was one of the two main suitors left vying for Boots, the other being Indian billionaire Mukesh Ambani's Reliance Industries and US private equity titan Apollo Global Management.

Back in January, 2022, it was reported that the Blackburn-born brothers were considering a takeover bid for Boots worth up to £10 billion. The future of the high street giant, headquartered in Beeston, has been subject to speculation over its sale throughout the past few months.

Walgreens has been touting Nottingham-based Boots for around £7billion, though bidders are said to be hoping to pay closer to £5billion. Founded by John Boot in 1859, it is the UK's largest pharmacy and beauty retailer. It now sells products around the world, and in the year ending August 2021 it had more than 315,000 staff, with sales of £105billion, as seen in The Daily Mail.

The Issas first teamed up with TDR to buy Asda in 2020 for £6.8billion. As well as eyeing Boots, they tried to buy convenience chain McColl's – but were beaten by Morrisons. Representatives for the Issas and TDR declined to comment. A successful sale of Boots would be the biggest deal to happen in the UK since the cost of living crisis began to bite, and would show private equity firms still have the appetite to buy in a more uncertain economic environment.

Interest rates are rising as central banks try to tame inflation, but this pushes up the cost of debt for buyout firms who borrow to help pay for the businesses they buy. Experts at the World Economic Forum meeting in Davos last week said private equity interest in the UK would probably hold strong, despite rising rates.

They noted that the Bank of England's base rate – at 1 per cent – was low by historic standards, and buyouts would be driven by businesses needing money to adapt to a greener and post-pandemic future.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.