MARKET REPORT: Boots proprietor Walgreens soars on takeover speak

Shares in the US-based owner of pharmacy chain Boots have soared on talks of a takeover by private equity.

New York-listed Walgreens Boots Alliance, which owns the High Street chain as well as US group Walgreens, surged 22 per cent following a report that it was in talks to sell itself to buyout group Sycamore Partners.

The two firms have been discussing a takeover deal which could be completed early next year, according to the Wall Street Journal. 

A sale is expected to result in parts of the business being sold off by Sycamore, sparking speculation about the future of Boots. Boots and Walgreens merged in 2014.

Back in the Square Mile, the mood was cautious. The FTSE 100 index closed down 0.9 per cent, or 71,72 points, at 8280.36 and the FTSE 250 index lost 0.4 per cent, or 75.33 points, to 20973.94. 

Sid should have been happy. However, investors in Centrica were cautious even as it announced a £300million extension to its existing share buyback programme, and said it expects annual earnings to be in line.

Shares surge: New York-listed Walgreens Boots Alliance, which owns Boots as well as US group Walgreens, surged 22% following a report it is in talks to sell itself to Sycamore Partners

Although the British Gas owner’s 2024 adjusted earnings per share are likely to broadly match the analyst consensus forecast of 18.5p, it would still represent a 45 per cent decline from its 2023 outcome.

The company flagged the usual uncertainties for the balance of the year, including weather, commodity prices and asset performance. Centrica shares inched down 0.3 per cent, or 0.4p, to 131p.

After climbing in the previous session on China stimulus hopes, mining groups returned some of that largesse as trade data from the major metal consumer showed a fall in exports and imports.

FTSE 100-listed Antofagasta fell 3.5 per cent, or 63p, to 1752.5p, Glencore lost 2.3 per cent, or 8.95p, to 385.9p, and Anglo American shed 1 per cent, or 26p, to 2505p.

Elsewhere, Asia-focused financial group Prudential also retreated, falling 1.4 per cent, or 9.8p, to 671.6p following a report that the blue-chip firm is considering options for its asset manager Eastspring Investments that include selling a minority stake to help broaden the business.

But on the upside among the blue-chips, British Land rallied 1.6 per cent, or 5.8p, to 372.2p after analysts at Goldman Sachs upgraded their rating to ‘buy’ from ‘neutral’, citing a stronger growth outlook.

Student accommodation group Unite was also lifted by a broker upgrade, adding 0.5 per cent, or 4p, to 839p as analysts at investment bank JP Morgan Chase upped their stance to ‘overweight’.

On the second line, First Group was the top riser, gaining 6.5 per cent, or 10p, to 164.1p as it announced its entry into the London bus market after agreeing to buy the French state-owned RATP Dev Transit London, an operator with a 12 per cent market share, for £90million.

But cyber-security group NCC was at the bottom of the FTSE 250, dropping 15.3 per cent, or 24.8p, to 137.6p as it warned that lengthening sales cycles would mean modest revenue growth in the current financial year.

Stock Watch – Tortilla Mexican Grill

Tortilla Mexican Grill surged after the burrito chain hiked its full-year revenue guidance, reflecting a continuation of the strong sales recovery by its UK business.

The AIM-listed firm said its UK-based revenues are expected to be between £64million and £64.3million.

Overall trading for the 2024 financial year was in line with expectations, with adjusted net debt projected to be £7.3million at the year-end. Shares rose 2.9 per cent, or 1.5p, to 53p.