(Bloomberg) -- Financing bankers fretting over the market’s volatility have been hesitant to fund multi-billion pound bids for Boots drugstore, according to people familiar with the matter.

They’re nervous about signing new funding deals, the people said, given the whopping $20 billion that banks underwrote but can’t get off of their balance sheets. Of the two rival camps keen on acquiring Boots, only a consortium backed by Britain’s billionaire Issa brothers and TDR Capital has put in a bid as of last week, the people said, declining to be identified because they aren’t authorized to speak publicly about the matter. But the bid was non-binding, which means banks haven’t committed to anything yet.

The other camp -- Indian tycoon Mukesh Ambani and buyout firm Apollo Global Management Inc -- may put in a bid this week if they manage to secure 3 billion pounds ($3.8 billion) of senior debt, their preferred way of financing the deal, the people said.

It’s a high-profile example of the challenges of funding mergers and acquisitions when markets are so erratic. The competing forces of recession risks in the UK and rising inflation are pulling prices in different directions, driving a gauge for volatility for Bloomberg’s index of junk-rated sterling bonds to the highest in about two years.

During calmer times, banks would’ve been fighting for a piece of the action, given that Boots is a well-established high street brand. But the fact that banks backing the buyout of Wm Morrison Supermarkets Plc haven’t completed the 6.6 billion pound financing -- even though they underwrote it in August -- isn’t helping. 

So far, Walgreens Boots Alliance Inc. has had to push back the May 16 deadline for bids, although it’s unclear until when. The company also hasn’t decided how much of a stake it wants to retain in Boots, with estimates ranging between 20% and 40%, the people said. And while that has delayed the bidding process, too, the market’s volatility is the main issue.

Representatives for the Issa brothers, Apollo and Reliance Industries declined to comment. Spokespeople for TDR and Walgreens weren’t immediately available to comment.

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