Sigma Healthcare has withdrawn from discussions to acquire Boots after concluding the potential transaction did not align with its strategic priorities or capital allocation objectives.

In a statement today, Sigma said that following an initial review it had determined that an acquisition of the UK pharmacy and retail chain “would not currently meet its strategic and capital investment objectives”.

The decision ends speculation over a deal that would have significantly expanded Sigma’s presence in the UK following its acquisition of a controlling stake in Greenlight Healthcare earlier this year.

Despite stepping away from Boots, which is owned by private equity firm Sycamore, Sigma said international growth remains a core strategic priority and reiterated its intention to continue expanding in existing offshore markets while evaluating opportunities in new regions and potential acquisitions.

Sycamore had previously been linked with Canada’s Weston family, the biggest shareholders in Associated British Foods, with the two reportedly holding talks over acquiring the chemist chain.

Sigma shares rose more than 8% on the Australian Securities Exchange (ASX) following the announcement.

According to AJ Bell, the development may reopen the possibility of Boots returning to public markets after nearly two decades away from the stock market.

The firm also suggested Sigma’s withdrawal is a more likely a result of caution over the execution risks associated with a large international acquisition rather than concerns about Boots’ underlying business.

"A Boots IPO would be a much-needed boost for the London market. There have been several high-profile departures thanks to takeovers or a change in listing venue in recent years and this has been compounded by a distinct lack of fresh blood coming in," said Russ Mould, investment director at AJ Bell.

"Boots is a fixture of the UK retail industry and the appointment of Currys boss Alex Baldock as CEO may create some investor buzz if the company does pursue a listing given his successful track record."

---