Boots to consider KKR's £9.7 billion offer
By Our Corporate Bureau | 12 Mar 2007
The management of the Nottingham-based drugs and medical consumables wholesaler, Alliance Boots, is meeting to decide whether to open its books to the US private equity group, KKR, which has made it a £9.7 billion offer.
Alliance Boots was formed last year with the £7 billion merger of Boots, and chemist group Alliance Unichem which created one of Europe's largest drugs, beauty and healthcare groups, with sales of more than £13 billion.
KKR is believed to be behind a possible takeover bid, believed to be worth £10 per share, that led to a rise in Boots' shares last week. Its shares soared more than 18 per cent after it said it had received a "preliminary and highly conditional" approach.
Described as a "friendly approach", the KKR offer has the backing of Italian billionaire Stephano Pessina, who owns a 15 per cent stake in Boots. According to commentators, the fact that one of Boots' key investors was working with KKR on the offer increased the likelihood of the deal going through.
Others predict that the Alliance Boots board would be keen on encouraging a bidding war with the aid of other potential acquirers. However, trade unions warn that selling the group to a private equity firm could lead to "asset-stripping".
Kohlberg Kravis Roberts & Co, or simply KKR, is the world's biggest private equity firm and was recently part of a consortium that pulled-off the world's biggest private equity deal leading to a $45 billion buyout of US utility TXU Energy.
It was recently in the news for its bid for UK's largest retail group Sainsburys'.
Alliance Boots was formed last year with the £7 billion merger of Boots, and chemist group Alliance Unichem which created one of Europe's largest drugs, beauty and healthcare groups, with sales of more than £13 billion.
KKR is believed to be behind a possible takeover bid, believed to be worth £10 per share, that led to a rise in Boots' shares last week. Its shares soared more than 18 per cent after it said it had received a "preliminary and highly conditional" approach.
Described as a "friendly approach", the KKR offer has the backing of Italian billionaire Stephano Pessina, who owns a 15 per cent stake in Boots. According to commentators, the fact that one of Boots' key investors was working with KKR on the offer increased the likelihood of the deal going through.
Others predict that the Alliance Boots board would be keen on encouraging a bidding war with the aid of other potential acquirers. However, trade unions warn that selling the group to a private equity firm could lead to "asset-stripping".
Kohlberg Kravis Roberts & Co, or simply KKR, is the world's biggest private equity firm and was recently part of a consortium that pulled-off the world's biggest private equity deal leading to a $45 billion buyout of US utility TXU Energy.
It was recently in the news for its bid for UK's largest retail group Sainsburys'.