|Bid||221.90 x 0|
|Ask||222.10 x 0|
|Day's range||218.00 - 222.40|
|52-week range||2.22 - 332.67|
|Beta (5Y monthly)||0.38|
|PE ratio (TTM)||22.46|
|Earnings date||07 Oct 2020|
|Forward dividend & yield||0.09 (4.21%)|
|Ex-dividend date||21 May 2020|
|1y target est||269.93|
(Bloomberg Opinion) -- The colossal buyout of Walgreens Boots Alliance Inc. mooted last year may now look like a fantasy. But the pandemic will create opportunities for Chief Executive Officer Stefano Pessina to do preparatory dealmaking that would make it easier to take the drugstore group private. One option for the Italian billionaire could be to remove the company’s middle name by selling the historic Boots business in the U.K.Attention has recently focused on whether the owner of Walgreens and Duane Reade pharmacies could offload its pharmaceuticals wholesale arm. Drug distribution company AmerisourceBergen Corp. approached it about buying the unit for $6 billion, Reuters reported in May. Coincidentally, Walgreens has a 28% stake in AmerisourceBergen that could be worth a similar amount.But Pessina is unlikely to want to part with the division, which mainly operates under the Alliance Healthcare brand. It’s where he began building his empire more than four decades ago. Whereas Boots, the British high-street retailer that began life selling herbal remedies in Nottingham in 1849, didn’t become part of his company until 2006. That makes the chain, with about 2,500 stores in the U.K., a plausible alternative.True, Boots’s sales and profits have declined over the past three years as it grappled with online competition. But it was one of the few retailers allowed to continue operating in Britain during the pandemic. With the Covid-19 crisis expected to spark a surge in spending on health, a buyer might see some turnaround potential in the asset now.That may help Pessina get a decent valuation for the division, which generates two-thirds of its sales from non-prescription health-care and beauty products. According to the most recent accounts available, Boots U.K. had 6.7 billion pounds ($8.3 billion) of revenue in the year to August 2019. Ebitda fell from 572 million pounds in 2018 to 391 million pounds in 2019, hurt by a 70 million-pound increase in costs from a plan to close 200 stores.Given Boots is a largely defensive brick-and-mortar retailer, a useful valuation benchmark would be the U.K. supermarkets, which are valued at between five and eight times their estimated yearly Ebitda. The extent of Boots’s exposure to higher-margin beauty and personal-care items argues for a top-end valuation. That would imply an enterprise value of about 4.2 billion pounds ($5.2 billion), assuming the business can generate annual Ebitda of about 500 million pounds, with another 30 million pounds from its optician services.Boots also operates stores in Ireland, Norway, the Netherlands and Thailand, and it owns 49% of a hearing-care joint venture with Sonova Holding AG. So depending what is included, the exit price may be higher. The question is who might want to buy Boots. A.S. Watson Holdings Ltd., owner of the British Superdrug chain, would be the obvious acquirer, but a combination of the two would likely be prohibited on competition grounds. The same goes for the U.K. supermarkets, even though Tesco Plc has the scale and its incoming CEO Ken Murphy has been a Walgreens lifer.Maybe private equity would be interested in a second go. In 2007, a year after merging his Alliance Unichem chain with Boots, Pessina took the group private with KKR in a $14 billion deal, then Europe’s biggest-ever buyout. This time, an acquirer would need to believe in the opportunity to tap into demand from consumers prioritizing their health and be willing to invest in modernizing Boots’s stores and reinforcing its online offering.Of course, a sale of Boots would be small compared to a transaction encompassing Walgreens as a whole. But it may be the best deal available to Pessina right now, one that could set the stage for even bigger things another day.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The European Union is going to hold Amazon.com Inc.’s feet just a little bit closer to the fire. While this could make Jeff Bezos’s life trickier, it’s unlikely to be a catastrophe for the e-commerce giant and its founder. Still, the case can’t be ignored.The EU’s antitrust regulator plans to file a formal complaint against Amazon over the way it treats third-party sellers, Dow Jones reported on Thursday. The bloc’s probe started almost a year ago and focuses on Amazon’s marketplace operations. That’s where third-party retailers — from corner stores to multinationals — can flog their wares directly on the Seattle company’s website. It’s different from Amazon’s other approach, where it just buys a product from a supplier and sells it.The problem is that running the marketplace means Amazon can learn which products are popular and where, even when these aren’t goods that it’s supplying directly. It would be similar if Walmart Inc. had instant sales data from all of its brick-and-mortar rivals. Amazon has been accused of using this information to create Amazon-branded goods that then compete with the equivalent products made by marketplace sellers.Amazon’s data gives it a potential advantage even if sellers try to opt out of its ecosystem. Take fashion, for example, where operating as a retailer on the company’s marketplace is tough. You only get a prominent placement on the website if your product has received a certain number of reviews, usually about 15. Because fashion labels change their product lineups several times a year, it takes a lot of effort and expense to reach that number each time. That’s why many just don’t bother selling on Amazon at all.Yet Amazon will still know what kind of fashion products its customers want, from their searches and purchasing habits. So when it can’t get enough supply of a particular item — say if the retailer has run out of stock, or has simply opted not to sell on Amazon — it can manufacture its own equivalent, in this case a t-shirt or jeans. Amazon might also deem that the existing product is not at a compelling enough price for its customers. Most of Amazon’s 200 or so own-brand product lines are in fashion.Bezos’s company argues that what it does is no different from real-world retail giants such as Walmart, Tesco Plc and Carrefour SA making their own branded products. The difference may be in the power that Amazon now wields through its market data, and that third-party sellers are so dependent on its marketplace that its use of those data appears anticompetitive. Margrethe Vestager, the EU’s technology and antitrust chief, appears to believe she can demonstrate that.Any fine is unlikely to be crippling. Bloomberg Intelligence analyst Aitor Ortiz estimates it would be less than $1 billion, about 0.3% of Amazon’s expected revenue this year. But Vestager might attempt to change the company’s behavior. She’s done it before with Alphabet Inc. Now Bezos is up. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with...