2nd March 2022
Bite-sized business news from the UK and beyond
Good morning Anyone waiting for a delivery of a Porsche or Bentley may be left disappointed after a cargo ship carrying thousands of luxury cars sunk off the Portuguese Azores, almost two weeks after it caught fire. Fortunately no one was hurt and the cars, worth an estimated £116m, are covered by insurance.
- Bidders drop out of the running to buy Boots
- Russia faces growing isolation
Bidders drop out of the running to buy Boots
What’s going on?
Two of the main contenders to buy Boots have dropped out from the auction process as potential buyers have second thoughts about taking over the UK’s largest pharmacy chain.
Why is this important?
Boots was put up for sale by its American health group owners Walgreens in January and is expected to fetch as much as £8bn.
According to Reuters last Thursday was the deadline to submit first round bids for the 173-year-old high street retailer from some of the biggest investors in the world.
But in an unexpected twist, two of the early frontrunners, private equity giants Bain Capital and CVC, have reportedly pulled out due to concerns over the price expectations.
Walgreens has owned Boots since 2014 and rumours began circulating last October that it was considering selling the chain or listing it on the stock market.
With a footprint of 2,200 stores and 55,000 staff, Boots is one of the biggest high street retailers in the country and one of the biggest private sector employers.
Consumer behaviour has accelerated towards online shopping during the pandemic and owning a business with such a vast store portfolio could put a dampener on the value.
But investors are thought to be interested in developing Boots’ ecommerce beauty division and striking partnerships with the NHS to provide more healthcare services.
Unsurprisingly its other deep pocketed investors i.e. private equity firms who remain in the running. Among them is Asda owner TDR Capital who is reportedly working on plans to integrate Boots into the supermarket chain’s stores if successful.
The sale of Boots would be among the most major consumer retail deal for years. Given its close links to providing NHS services, a sale would also draw a lot of attention from the government and public.
Russia faces growing isolation
Following Russia’s invasion of Ukraine, Western allies have imposed a host of economic sanctions aimed at cutting off the country from the global financial system.
Many companies are distancing themselves from Russia. For example, British Gas owner Centrica is exiting its gas supply agreements from Russian firms and Jaguar Land Rover is pausing car deliveries to Russia. Even some UK bar operators have said they will stop serving Russian vodka.
But Russia’s isolation is quickly stretching beyond the finance world. Organisations in sport, entertainment and even education are taking a stand and severing ties with the country:
- Russia has been banned from the World Cup and Eurovision Song Contest and there’s growing talk that its athletes won’t be allowed to compete in the Winter Paralympics that starts this week.
- Disney, Warner Bros. and Sony are halting all of their upcoming film releases in the country.
- The group that represents UK private schools has told its members not to accept fees from Russia.
Faced with overwhelming public outrage at Putin and sympathy with Ukraine, Western organisations have no choice but to cut their connections to Russia.
Stat of the day
Next month MPs will receive a 2.7% pay rise taking base salaries to £84,144
Other stories to keep you in the loop
- Highest rail fare rise in nine years takes effect
- Britons slow credit card spending and increase savings – for now
- UK and New Zealand sign free trade deal
- Sainsbury’s embarks on major in-store shakeup putting 2,000 jobs at risk
- Value of Mirror publisher Reach plunges 25% after it warns of profit squeeze
- Visa and MasterCard exile Russia from networks
- Serena Williams raises $111m for new venture capital fund
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