Sycamore Partners is planning a three-way split of Walgreens Boots Alliance if a deal to take the struggling pharmacy chain private is reached, the Financial Times reported, citing people familiar with the matter.
Walgreens' three businesses - US retail pharmacy, Boots UK and US healthcare - will be separated and have distinct capital structures, according to the report. Sycamore and Walgreens both declined to comment on the report.
'Twist' In The Tale
The report 'marks another twist in the potential go-private story' for Walgreens, Leerink analyst Michael Cherny said.
Walgreens has reportedly been in talks to sell itself to private equity firm Sycamore since December, but a deal is yet to be reached.
Media reports have also pointed to issues with financing for a buyout and discussion with Sycamore briefly falling out.
The financing of the take-private deal is not expected to be an obstacle, according to the FT report.
Walgreens' executive chairman Stefano Pessina, who currently holds a 17% stake, is expected to maintain a significant share of the company, it added.
First-Quarter Performance
In January, Walgreens Boots Alliance beat analysts' lowered expectations for first-quarter adjusted profit and indicated that its restructuring was taking hold.
The company announced thousands of store closures, a $1 billion (€970 million) cost-cutting programme, and is exploring options for its non-core businesses as CEO Tim Wentworth seeks to kick-start growth and stem a sharp drop in its share price.
"Our turnaround will take time, but as today's results demonstrate, we are executing with urgency," Wentworth told analysts in a post-earnings conference call.
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