MISSISSAUGA, Ontario — Katz Group Canada is withholding comment on a report in the Edmonton Journal Wednesday that speculated on the potential sale of the Canadian drug store giant.
“Katz Group does not comment on rumors or speculation,” said company spokeswoman Michelle Lee when asked about the report.
The Edmonton Journal quoted a report from Perry Caicco, a retail analyst with CIBC World Markets. In that report, issued Jan. 9, Caicco speculated that “reduced profitability and remaining uncertainty about drug reforms in certain provinces, most notably Alberta,” could prompt Katz management, including Katz Group chairman Daryl Katz, to consider selling the company.
Katz originally was headquartered in Edmonton before moving its central offices to suburban Toronto. The company fields more than 1,800 drug stores across Canada under its flagship Rexall banner and other trade names, including PharmaPlus, Guardian and IDA. Its chairman also owns the Edmonton Oilers.
Among the firms that may have expressed interest in the drug store company, according to Caicco and the Edmonton Journal, is the Jean Coutu Group, which operates nearly 390 franchised drug stores in Quebec, New Brunswick and Ontario and owns a sizeable equity interest in Rite Aid. Although Caicco acknowledged that Coutu has given no indication of interest in Katz Group, he noted that government cuts in generic drug reimbursements are reducing profitability in pharmacy retailing in Canada and could trigger a sale, according to the newspaper.
Katz, Caicco speculated, could command a price of $1 billion to $1.5 billion [Canadian].