described as “clandestine”. Overall, Reliance Retail’s cash capital expenditure nearly tripled to $3.5 billion last year. Analysts at Ambit guess that, alongside acquisitions, capitalised customer acquisition costs are beginning to bite. In regards to its rapidly expanding asset base, Jefferies researchers note “more company disclosure will help”.
Assuming Reliance Retail's bottom line grows at its current annual pace of 35% for the next two years, the business would be worth some $75 billion on Amazon's forward earnings multiple, Breakingviews calculates. That’s below most analyst sum-of-the-parts valuations. Lenders may be willing to finance a Boots deal if it helps shore up a lucrative relationship with India’s biggest company, but privately most question the strategic logic of a large overseas purchase.
The report also noted other bidders including the billionaire Issa brothers that own supermarket chain Asda and others are no longer in the process. Reliance and Apollo have not yet sealed financing for the deal. Bidders in earlier rounds had valued the Boots business as low as 5 billion pounds , below the mooted $8 billion valuation Walgreens is seeking, the report added.Editing by Robyn Mak and Thomas Shum