// KKR makes formal approach for Walgreens Boots Alliance buyout
// The investment firm eyeing a buy out of shareholders for the Boots owner, according to Bloomberg
// Follows speculation that CEO Stefano Pessina wants to take Walgreens Boots private
Reports have emerged that investment firm KKR has made a formal approach to buyout Boots’ parent company so as to take the business private.
According to Bloomberg, KKR has reportedly been preparing to potentially buy out shareholders of Walgreens Boots Alliance.
Should it eventuate, it could become the largest leveraged buyout on record, given Walgreen Boots Alliance is currently worth over $55 billion (£48 billion).
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The news follows speculation that Walgreens Boots Alliance boss Stefano Pessina was looking to take the company private.
Walgreens Boots Alliance had drafted in Evercore Partners to examine whether a deal can be agreed after it reportedly held talks with private equity groups.
There is no guarantee KKR – which sold its final shares in Walgreens Boots Alliance from a previous buyout three years ago – would actually make a formal takeover bid.
Walgreens Boots Alliance has over 18,750 stores in 11 countries and has annual revenues of nearly $34 billion (£30 billion).
However, the company has been under pressure to cut costs as its operating income fell by a fifth in the last year.
The group posted a 20.5 per cent decline in operating income to $5 billion (£3.9 billion) in the year to August 31, down 9.6 per cent on an adjusted basis to $6.9 billion (£5.4 billion).
Walgreens Boots Alliance share price has also declined by nearly 40 per cent since last December.
If a deal were to go through, a leveraged buyout would require the involvement of several private equity firms willing to invest lump sums of cash.