The blame for the collapse of the sale of Boots to Walgreens is being attributed to sudden changes in market conditions.
Most obviously, rising interest rates around the world mean that financial buyers, willing to throw themselves into assets, have become negative about risk.
First, private equity barons with their eye set on the High Street chemist fell. Then the ever-ambitious owners of Asda, Mohsin and Zuber Issa, decided to break away. Now Indian billionaire Mukesh Ambani, who works with Apollo, has also thought better.
On the shelf: first, the privately owned barons with one eye on Boots fell. Then, the always ambitious owners of Asda, Mohsin and Zuber Issa, decided to break away
The vision of Stefano Pessina de Boots, in the heart of a conglomerate of pharmacies that covers the whole world, seems increasingly unattainable.
As the owner of a 17% stake in Walgreens and “executive chairman,” Pessina still has a big influence on what happens.
But the mantle of leadership has shifted to CEO Rosalind Brewer, who has a laser focus on developing and remaking Walgreens ’offering in the United States.
In this context, Boots is in danger of becoming a stranded asset.
The change of state could become a big problem for Boots boss Sebastian James.
So far, Pessina has made sure that Boots is properly invested and there have been funds to improve the digital presence, to refurbish key stores in the city center and to strengthen the iconic No7 skin care brand.
There is great customer loyalty to Boots, bolstered by its contribution to the nation’s health during the pandemic.
However, it is difficult to escape the fact that the 2,000-store store portfolio needs renovation and investment.
Pessina and Walgreens have not given up a partial fleet in the UK. The weather for the initial British public offerings will have a big test next month when GlaxoSmithKline makes the divisions and cuts its Haleon sanitary arm.
The roller coaster of the property could not be more disturbing to Boots CEO James.
An eventual IPO would be attractive. But not if the group finds itself without investment funds due to Walgreens ’increased ambition. James should be thinking about his options.
Crossed cables
Bloomberg is a large investor in Britain who has spent £ 1bn on an architecturally important headquarters in the city.
He has been on a recruitment campaign, bringing together leading British journalists for the launch of his Bloomberg UK service.
However, despite all this, he has a jaundiced view of the UK’s prospects.
In an editorial this week, he argued that the echoes of the 1970s and early 1980s “are impossible to ignore in the UK today,” citing supply shocks, sparse growth, public finances unsustainable, rising prices and union unrest.
Without wanting to question all this, it is worth noting that the UK’s public finances are in better shape than some in Europe – it is no closer to the recession than its neighbors – and, unlike the 1970s, much of the population is protected from hardship. for pandemic savings. And Chancellor Rishi Sunak is not heading for the IMF, cap in hand, as Labor did in 1976.
In a report just released, Bloomberg argues that Red Bull Racing’s decision to spend £ 5m on building a production car in the UK is “a rare victory” for the British motor industry .
If you hadn’t noticed before, much of F1’s technology, sold to carmakers around the world, is designed in that country and is worth more than £ 6.3 billion for the economy.
In addition, UK car manufacturing, from Bentley to Nissan in the Northeast and Mini in the Midlands, is doing well, despite the shortage of semiconductors.
Rare victory? Hooey.
Number game
After three decades of running the National Lottery, it’s no wonder Camelot is doing his best to maintain the franchise he loses to Czech operator Allwyn after 2024.
It aims to show that under his leadership, the National Lottery continues to raise record amounts for good causes: £ 1.9 billion a year through April 2022.
It has also launched a series of initiatives designed to demonstrate how best to connect game players with their local communities.
Camelot is relying on the courts to overturn the award of the Allwyn Gaming Commission license and is likely to mention the higher risks of the winning bid.
Executive director Nigel Railton might be better advised to focus on what’s to come next for the Camelot brand and colleagues if, and when, it disconnects.
Some links in this article may be affiliate links. If you click on them, we can earn a small commission. This helps us fund This Is Money and keep it free. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.