“As a result of market instability … no third party has been able to make an offer that adequately reflects the high potential value of Boots,” Walgreens said.
Updated at 8:12 am EST
Britain’s Sky News had first reported that Walgreens, which had planned to auction the division, known as Boots the Chemist, in a process that could have valued Britain’s biggest drugstore chain at more than $10 billion, was likely scrap the sale ahead of its third quarter earnings later this week.
Walgreens said it had held a number of “productive discussions” in terms of the sale, but noted that “as a result of market instability severely impacting financing availability, no third party has been able to make an offer that adequately reflects the high potential value” of either Boots nor the No7 Beauty company.
The 173-year old Boots, whose 2,200 stores are a mainstay on British high streets, was taken in by Walgreens in 2014 for around £9 billion, but effectively put on the block earlier this year when the group unveiled plans for a strategic review of its U.K. business.
“We have now completed a thorough review of Boots and No7 Beauty Company, with the outcome reflecting rapidly evolving and challenging financial market conditions beyond our control,” said CEO Rosalind Brewer. “It is an exciting time for these businesses, which are uniquely positioned to continue to capture future opportunities presented by the growing healthcare and beauty markets.”
“The Board and I remain confident that Boots and No7 Beauty Company hold strong fundamental value, and longer term, we will stay open to all opportunities to maximize shareholder value for these businesses and across our company,” she added.
Walgreens Boots Alliance shares, a Dow component, were marked 1.6% lower in pre-market trading Tuesday to indicate an opening bell price of $41.53 each.
Walgreens will publish its third quarter earnings on Thursday, with analysts looking for a bottom line of 92 cents per share on revenues of $32.06 billion.
Solid U.S. pharmacy sales helped it top Street forecasts in the first quarter, with revenues rising 3.8% to $33.8 billion as comparable store sales in the U.S. were up 9.5%.
Prescription fillings were up 3.9% from last year to 300 million, while pharmacy sales fell 3.3%. The group also added that it provided 12 million Covid vaccinations over the quarter, down from 13.5 million over the prior period