Walgreens Boots Alliance shares rise on reports of KKR buyout interest
Shares in Walgreens Boots Alliance jumped in early trading today amid reports that KKR has approached the drugstore giant about taking it private.
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Private equity firm KKR is preparing a proposal to buy out shareholders of Walgreens Boots in what could be the biggest ever leveraged buyout, sources told Bloomberg.
The reports have pushed up shares in New York-listed Walgreens Boots by more than six per cent.
Bloomberg’s sources said that there was no certainty the deliberations will lead to a definitive takeover offer.
According to the news organisation, Walgreens Boots has a market value of roughly $46bn (£35.7bn), meaning a leveraged buyout of the firm would top current records.
Speculation that Walgreens Boots could be bought out has mounted in recent weeks, with KKR said to be one of several firms looking at a deal to take the firm private.
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Like other pharmacy retailers, Walgreens is facing pressure from a combination of weak retail shares and drug reimbursement pressure.
Walgreens, which has suffered a 7.8 per cent drop in ints share price yet-to-date, is facing a swathe of industry challenges this year, with online rivals and changing consumer habits denting the drug care company.
Walgreens boss Stefano Pessina, who is the firm’s largest shareholder with a 16 per cent stake, could roll his equity into the deal to help finance the transaction, a source recently told Reuters.
KKR has been dominated private equity headlines in recent weeks, with Reuters reporting that the firm is targeting a record $15bn raise for its planned Asia-focused buyout fund.
Earlier this week KKR raised its biggest-ever European fund at €5.8bn, with 28 per cent of the fund already committed to a number of deals.