Investing.com -- A buyout of the Walgreens Boots Alliance (NASDAQ:WBA) could result in a three-way division of the company's main businesses, The Financial Times (FT) said in a Thursday report. The company’s executive chair Pessina is expected to retain a substantial stake in the company as part of the deal, the report said.

Walgreens shares surged over 7% in premarket trading after the report. 

Sycamore Partners, a New York-based investment firm known for its focus on struggling retailers, has been in intermittent negotiations for the purchase of Walgreens.

The firm plans to take the company private initially and then separate Walgreens’ three core segments—US pharmacy retailer Walgreens, UK-based Boots, and specialty pharma unit Shields Health Solutions—into independent entities with their own capital structures, the FT said, citing sources familiar with the matter.

Per the report, talks between the companies have been “complicated” due to the volatility in Walgreens’ stock price.

Following initial reports of the buyout talks in December, the company's shares saw a significant surge, but have since retreated, valuing the company at approximately $9.5 billion. FT said that the deal discussions could still fall apart in the upcoming weeks.

Walgreens, once valued at over $100 billion in 2015, has seen its market value decline as competitors have eroded its market share. In response to the challenging business environment, the company announced in October that it would be closing around 1,200 stores in the next few years, following a nearly $9 billion net loss for the fiscal year 2024.

Pessina, who merged his Alliance Boots with Walgreens in 2014 and owns nearly 17% of the company, has been reportedly instrumental in the buyout discussions as he seeks to address the declining share price.

Related Articles

Walgreens Boots buyout could result in a three-way split of the business - FT

India's economic growth faces challenges, IMF suggests reforms

Goldman Sachs tweaks its diversity policy