Boots bidders mull pension scheme options as Walgreens looks to spin off chain
Private equity firms readying bids for high street chemist Boots are grappling with how to deal with the firm’s major pension liabilities, according to reports.
Pensions liabilities guaranteed by Boots owner Walgreens Boots Alliance (WBA) are reportedly worth billions of pounds, and private equity firms bidding for the chain have been informed that WBA wants to offload them to a new owner, Sky News’ Mark Kleinman first reported.
Boots pension scheme is one of the largest retirement funds in the UK at approximately £8bn.
Private equity insiders told Sky that pension trustees are expected to look for additional funding as part of any private equity buyout.
A deadline for initial offers for the chain passed on Thursday and at least three suitors have tables bids for the firm, including US-based Sycamore Partners and a consortium comprising Bain Capital and CVC Capital Partners.
It was revealed in January that Bain Capital and CVC had teamed up to launch a bid for the firm, with one of CVC’s managing partners Dominic Murphy, having played a key role in the £11bn takeover of Alliance Boots by KKR in 2007.
WBA has reportedly valued the chain at between £5bn and £6bn.