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Bestway paid a 'fair price' for Co-op, says CEO

Bestway CEO Zameer Choudrey says he was "happy to pay" £620 million for the Co-op pharmacies 

Bestway have told C+D they are happy with the price they paid for the Co-operative Pharmacy and disclosed they were not the highest bidder

EXCLUSIVE 

 
 

Bestway got a "fair price" for the Co-operative pharmacies, chief executive Zameer Choudrey has told C+D in an exclusive interview.

 

The UK-based food wholesaler bought the 771 branches in July for £620 million – a cost of £804,000 per pharmacy – and Mr Choudrey said he was "happy" with the price the company paid. 

 

"It was a fair deal for the Co-operative Group and for us. I don't think we under- or over-paid," he told C+D on Tuesday (October 7). 
 

Bestway, which took formal control of the pharmacies on Monday (October 6), had not been the highest bidder for the pharmacy chain but it was a "better fit" for the business, he said. Mr Choudrey did not confirm who the rival bidder was, but both Boots and Lloydspharmacy were remoured to be interested in buying the chain. 

 

The Bestway Group owns food wholesale, cement manufacturing and banking businesses and Mr Choudrey said there had been "scepticism in the market" when it decided to enter the pharmacy sector. 

 

"When we went into cement and banks people were asking questions, and this time was no different. We were determined and we got there in the end," he added.

 

Co-operative Pharmacy managing director John Nuttall – who confirmed he would retain his role following the sale – told C+D that Bestway had provided the "strongest credentials" of any bidder and had been "prepared to invest" in  the business.

 

With the addition of the Co-operative pharmacies, Bestway will have an annual turnover of approximately £3.6 billion and a global workforce of more than 33,000 people, including more than 11,900 in the UK.

 

The group has the right to operate the pharmacies under the Co-operative branding for a transitional period of 12 months, but had already begun "developing and testing" branding with the aim of confirming a new name by April 2015, it said.

 
 

Timeline of the Co-operative sale

 

April 2014: The Co-operative Group announces that its pharmacies will not be part of its future plans, after a "disastrous" financial year.

 

April 2014: C+D reports that a consortium of pharmacists has pledged more than £40m to buy the business.

 

May 2014: A well-placed source confirms that Alliance Boots has put in an offer to buy the pharmacy chain, although it is unclear whether the deal is for all 771 branches.

 

June 2014: Another group of pharmacists forms a legal partnership with the aim of either  bidding for the pharmacies itself or persuading the Co-operative Group to sell the branches to the independent sector.

 

July 2014: Lloydspharmacy parent company Celesio refuses to comment to C+D on claims by the Sunday Timesthat the multiple had also made an offer for the pharmacies.

 

July 2014:The Co-operative Group announces it will sell all 771 pharmacies to Bestway for £620m. Chief executive Zameer Choudrey says there is "great potential" to grow the business.  
 

October 2014: Bestway takes formal control of the pharmacy business and reveals plans to relocate its headquarters within Manchester.

 
 
 
 
What do you make of the Bestway deal? 
 
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7 Comments

Miracure Pharmacist, Work for a health/commissioning consultancy company

wow - maybe now ill be given a chance to locum for 'ex' co-op 'original' co-op didnt like my look but i look like the owner now lolol - im talking about the 1990s

N O, Pharmaceutical Adviser

"It was a fair deal for the Co-operative Group and for us. I don't think we under- or over-paid,"

Oh come one now, everyone knows you got the best deal. Pharmacy is the only arm of co-op that was / is still making millions in net profits. You may even turn over the whole lot in next 5-6 years. At a time where pharmacies are still sold at a premium of 1:1.25+ of turnover, yoy paid really under the actual market value.

Co-op had no choice as they could not wait and other multiples would have taken longer to complete. You were very lucky to have a healthy running business for less.

Anton Sobala, Locum pharmacist

Interesting to read that Bestway will be concentrating on dispensing as the core feature of the business. The admission that dispensing remains pharmacy's major raison d'être does at least show some common sense.

Pharmacy as a profession has really slipped up in recent years because the constant obsession with services amongst our 'leaders' has created the impression that dispensing is almost beneath us and hence no longer worth paying for. The whole concept of removing money from dispensing to pay for other roles was disturbing from the start......we are dispensing far more than ever before, leaving little time for other activities in many cases. Continued funding for dispensing ought to have been secured based on the recognition that although dispensing was already very accurate (in general), funding is needed to allow for improvements in the clinical checking process. In community, pharmacists are often unable to perform a true clinical check due to lack of information. We could, perhaps, have pushed for a redesign of FP10s to include additional clinical patient data, as an aid to the clinical check. Pharmacists would therefore increase their role in avoiding medication errors, and improving medication safety. The DoH recognises that most aspects of dispensing are routine and rather mechanical, hence the reluctance to pay for it. The important of the clinical check has been overlooked, I believe, in funding negotiations.

Services can be a great idea in theory, but overall, they haven't lived up to their promise. Services must be national, lacking in excessive paperwork, well-organised and should not be seen to duplicate the work of other HCPs. We should certainly avoid any services more suited to nurses or HCAs. All services should be clearly related to pharmacist's unique expertise in medication - services based around 'healthy living' and suchlike are all very well but this is not what pharmacists have trained in. A HCA can perform similar check-ups for less, right next door at the surgery. Whatever happens, we should never forget the if it wasn't for prescriptions and sales, few people would even come into the pharmacy at all.

It will be interesting to see what state community pharmacy is in in a few year's time.

N O, Pharmaceutical Adviser

""We should certainly avoid any services more suited to nurses""

&

"" if it wasn't for prescriptions and sales, few people would even come into the pharmacy at all. ""

So, either you are a retired Pharmacist or have a good share in some Surgery. You are trying to advocate we let the services go away from Pharmacy to Nurses, and what services are left that ONLY a Pharmacist can provide that the Nurses can not? Medicine optimisation?? That word has been used so much in every forum that it has lost its meaning and are MUR & NMS not meant to do that??

Of course prescriptions are the core responsibilities/ bread winners for the pharmacy. But, if we take your point #1 then why not Dispensing Doctors do that as well. Why do we actually need Pharmacies at all?

So my friend, think sensibly. We need more services to support the loss in funding from Prescriptions, to use our knowledge, reduce extra burden on other health care providers etc etc, the list is long. And we need people with the mentality to grow our sector and not just point fingers and show who can do the same job YOU can do.

London Locum, Locum pharmacist

Best post I've seen in a long time. Pharmacy is essentially dead in the water. The sad but unpalatable truth is that Pharmacists no longer do anything that nobody else can't do be better or for cheaper(sometimes both).
The profession does not even have respect respect for itself and so we watch the slow lingering death.

Sami Khaderia, Non healthcare professional

One man's loss is another ones gain. Its called the free market.

Sami Khaderia, Non healthcare professional

A business is worth what someone is willing to pay.

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