May 15, 2022
Suitors who have thrown their hat in the ring include private equity firms Apollo, TDR Capital and Sycamore.
Boots’ American owner has withdrawn over $5.3 billion (£4.3 billion) of dividends from its UK holding companies, despite raking in hundreds of millions of pounds of government pandemic support cash.The high street chemist’s UK-based parent company, Superior Holdings, coughed up $4.1 billion in dividends to Walgreens last year and a $909.6 million dividend the year before that, The Times reported.
What’s more, another UK-based holding company, WBA Financial, dished out a $353m dividend to Walgreens last year.
Boots received some £36m in financial support to furlough staff who could not work during Covid lockdowns.
The retailer also received £11m in PPE grants and £55m in business rates relief with an estimate from advisory firm Altus placing the chemist’s annual rates bill at £149m, suggesting the firm received hundreds of millions of support in total.
The dividends had not come “directly or indirectly” from Boots UK, a Walgreens spokesperson told the newspaper.
Drawing out cash from government emergency funds amid the pandemic helped the firm protect jobs at an “extremely challenging and uncertain time”, they added.
Adam Coffer, chairman of the Property Owners Forum, told The Times: “Walgreens claimed it couldn’t meet its contractual obligations to property owners but it looks like we have bankrolled its huge dividends.”
It has been speculated that the retailer’s deadline for proposals is fast approaching, with Walgreens reportedly setting a deadline of 16 May for bids.
It is hoping to sell the pharmacy chain for around £7bn, although a consortium made up of private equity titans CVC and Bain withdrew from the race after admitting they would only be willing to cough up £4bn for it.
Suitors who have thrown their hat in the ring and may potentially make a bid are thought to include private equity firms Apollo, TDR Capital and Sycamore.