KINGFISHER’S SUPERDRUG UP FOR SALE

Byline: James Fallon

LONDON — Superdrug, one of the U.K.’s leading beauty and health retailers, is officially on the selling block.
Kingfisher PLC, Superdrug’s parent, Thursday confirmed numerous reports that it plans to sell the chain. Superdrug originally was part of Kingfisher’s plans to spin off its general merchandise division into a separate company listed on the London Stock Exchange. However, Kingfisher said in a statement Thursday that it now believes it can get more money for Superdrug from an outright sale to another company.
“The decision on the appropriate method of separation, which now seems likely to include the sale of Superdrug, will be made in order to achieve the best value for shareholders,” a Kingfisher spokesman said. “The sale of Superdrug would not impact on the prospects of a successful stock market demerger — which is on course for the second quarter of this year — of the Woolworth’s and entertainment businesses.”
Kingfisher has received several preliminary approaches about buying Superdrug, which reportedly value the chain at about $500 million. The spokesman declined to identify the potential bidders, but they reportedly include Shoppers Drug Mart, the Canadian health and beauty retailer backed by Kohlberg Kravis Roberts; Kruidvat, a health and beauty retailer based in the Netherlands; and Schlecker, a German drugstore group.
Other companies mentioned as possible bidders include Wal-Mart, which already owns Asda in the U.K., and Walgreen Co., which also has been mentioned as a possible bidder for Superdrug’s main competitor, Boots the Chemist.
The spokesman said Kingfisher hopes to complete the sale of Superdrug within the first half of this year.
Superdrug operates more than 700 stores throughout the U.K. Over the last few years, it has increased its focus on selling beauty products, both major brands and private label products. The acquisition of Superdrug would give an overseas company a major foothold in the British beauty market, which currently is dominated by Boots.