Who's Knocking On The Door Of Boots?

Even before the board of Boots announced officially that it was reviewing the future of its prescription pharmaceutical division, speculation abounded as to whether this might be hived off. The questions really started after Boots decided to abandon further development of its potential cardiovascular drug Manoplax (flosequinan), when the product ran into toxicity problems (Marketletters passim).

Now, however, the rumors are escalating, largely as the result of reports in the Sunday Times newspaper, which has often been known to get exclusives, but also from time to time to get it wrong. Over two months ago, the ST said that a "City consortium" led by merchant bankers Fleming & Co was trying to put together a deal to buy the Boots pharmaceutical operation for a sum in the region of L650-L700 million ($1.02-$1.10 billion). Now the newspaper maintains that Zeneca, itself recently split off from ICI, is about to offer to pay L900 million ($1.41 billion) for this business.

Zeneca has also been the target of take-over and/or merger rumors, given that it is perceived as not of optimal size and having a lead product, Tenormin (atenolol) which has come off patent (and sales of which have shrunk to just a quarter of what they had been), and another, Zestril (lisinopril) facing the same fate next year.