The sale of UK chemist chain Boots by Walgreens Boots Alliance Inc (NASDAQ:WBA) could collapse as potential buyers struggle to arrange finance as consumer confidence wanes.
A bid from Asda's owners, the billionaire Issa brothers and private equity giant TDR, may not succeed, according to media reports, with inflation, which has reached a 40-year high, behind weakening consumer confidence amid declining discretionary spending.
The Issa brothers reportedly have had a tough time raising finance, with a source telling The Sunday Times, "it’s looking tough. The debt markets are closed."
This could allow a consortium of New York-based private equity firm Apollo and Mukesh Ambani's company Reliance Industries to swoop in with a rival £5.5bn bid for the health and beauty retailer.
The joint bid was around £1.5bn below the price set by Walgreens Boots Alliance initially.
CVC and Bain, two private equity giants, pulled out of the race in March after admitting they only wanted to pay £4bn for the pharmacy chain.
Boots employs more than 50,000 people and operates more than 2000 stores, making it one of the UK's biggest employers.
Walgreens Boots Alliance Inc (NASDAQ:WBA) announced earlier this year it would be selling Boots and interest was shown by private equity firms Apollo Global Management (NYSE:APO) and TDR Capital.