Boots suitor counts on lenders to help fund £5.5billion deal as takeover fears grow
// Boots bidders will make a firm offer but pin their hopes on a quartet of lenders
// Apollo Global Management and Reliance Industries lined up Royal Bank of Canada, Credit Suisse, Santander and Bank of America to help fund
Boots’ sole bidder to make a firm offer is pinning its hopes on a quartet of lenders as fears grow for global debt markets over large-scale takeovers.
A consortium including Apollo Global Management and Reliance Industries has lined up Royal Bank of Canada, Credit Suisse, Santander and Bank of America to help fund part of the more than £5bn acquisition, according to Sky News.
Funding markets have soared since Boots was put up for sale by Walgreens Boots Alliance, its US parent, a few months ago.
READ MORE: Boots takeover uncertain as buyers struggle to raise cash
Meanwhile, part of Apollo-Reliance’s offer is expected to be financed with equity, but remains uncertain about how much debt would be piled on Boots in the event of a sale.
Walgreens also expects to retain a significant minority stake in the health and beauty retailer in a bid to push through the deal.
Another potential bid from Asda owners – Mohsin and Zuber Issa and TDR Capital – remains uncertain.
Walgreens, which is advised by Goldman Sachs, decided that Boots was no longer its primary focus as it moved to its domestic operations.
Additionally, bidders face challenges such as finding an adequate solution for the £8bn pension scheme of Boots, one of the UK’s largest private pension funds.
If a formal offer does not materialize to a level deemed acceptable by the WBA Board of Directors, the company is likely to halt the sale process.
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