Walgreens could go private in deal with Sycamore Partners

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 on Thursday, citing people familiar with the matter.

Walgreens’s three businesses—U.S. retail pharmacy, Boots UK, and U.S. healthcare—will be separated and have distinct capital structures, according to the report. Sycamore and Walgreens both declined to comment on the report.

Shares of the Deerfield, Illionois-based company rose 5% to $11.62 in early trading.

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.

—Bhanvi Satija and Sriparna Roy, Reuters

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