Factors including the war in Ukraine, and rising inflation and interest rates “have combined to push up borrowing costs” for rumoured bidders like Asda’s Issa brothers and made banks reluctant to back offers, the newspaper claimed.

With Boot’s parent company Walgreens Boots Alliance reportedly asking for £7 billion, finding backers and funds to finance bids is “particularly difficult”, The Sunday Times wrote.

Read more: Boots UK: When could the chain's parent company decide on a buyer?

This is especially relevant to “the retail industry, which is bearing the brunt of a slowdown in consumer spending”.

According to The Sunday Times, Asda’s Issa brothers and private equity firm TDR – whose interest in scooping up the pharmacy chain has seemed to falter in recent weeks – are “still deliberating” on whether to place a bid for Boots and finding it “hard to raise finance” for it.

A Walgreens Boots Alliance spokesperson told C+D the company cannot comment on the sales process.

More clarity later this month

C+D speculated last week on when Walgreens Boots Alliance might choose a buyer for its UK segment, after newcomers to the auction – Reliance Industries and private equity firm Apollo – suggested paying between £5.5bn and £6bn for the chain.

According to The Sunday Times, “Apollo’s financing has been raised from investment banks, albeit at higher rates of interest than those on offer last year”.

The newspaper claimed Walgreens Boots Alliance would give an update on how the Boots sale is progressing when announcing its third quarter financial results on June 30. 

“If the American giant were to accept an offer, the bidder would still need to negotiate with the trustees of Boots’ £7bn pension fund,” it noted.

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