Boots agree £10.6bn takeover

Health and beauty giant Alliance Boots today backed a £10.6bn (€15.6bn) takeover by its deputy chairman Stefano Pessina and private equity group Kohlberg Kravis Roberts.

The retail and pharmaceutical group, which has several outlets in Ireland, looks set to be the first FTSE 100 firm to fall into private equity hands after agreeing the £10.90p-a-share offer.

Mr Pessina and Kohlberg Kravis Roberts (KKR) tabled the increased bid as it emerged that fellow suitors the Wellcome Trust and private equity firm Terra Firma had put forward an indicative offer of £10.85p a share, equivalent to £10.5bn (€15.45bn).

KKR and Mr Pessina first approached Boots last month with a proposal of £10 a share, but this £9.7bn (€14.27bn) offer was rejected for being too low.

The consortium came back with a revised £10.40 indicative offer weeks later and has since been trawling through the Boots books.

KKR increased its offer to £10.6bn (€15.6bn) in the face of competition from the Wellcome Trust consortium, which Boots said had put forward a "highly conditional" £10.85-a-share offer - already a substantial premium on the group's shares, which closed yesterday at 1049.5p.

But the KKR deal still has to be approved by shareholders and Boots has to remain open to any possible further offers.

A number of bidders are said to have been interested in buying the high street retailer and wholesale company since Mr Pessina and KKR emerged as possible buyers.

The takeover saga comes nine months after the group was created through a £7bn (€10.30bn) merger of Boots and Alliance UniChem.

Nigel Rudd, chairman of Alliance Boots, said he was "delighted that the board has been able to achieve such a good price for shareholders".

He added: "The formation last year of Alliance Boots created a hugely valuable business and this offer reflects that."