Vote due on Alliance Boots takeover

Alliance Boots’ shareholders will cast their votes today on the recommended £11.1bn (€16.3bn) takeover of the group by private equity firm Kohlberg Kravis Roberts and deputy chairman Stefano Pessina.

If approved, shareholders will receive 1139p a share – a premium of 39.8% to the share price before the announcement in March – in what will be the first ever private equity takeover of a FTSE 100 firm.

However, the extraordinary general meeting may not run as smoothly as the board may hope amid an ongoing dispute between the buyers and Boots’ Pension Scheme Trustees.

The scheme currently has a deficit of around £300m (€441m) and the trustees are asking for an upfront payment of around £500m (€735m) to take into account the increased financial risk stemming from the deal, which is to be funded through around £8bn (€11.75bn) of debt.

Although the pension trustees have no power to veto the deal, if no agreement is reached it would be the first time that a FTSE 100 company has been taken over without the approval of its pension fund trustees.

Union GMB stepped into the fray on Tuesday as it warned that trustees must insist on a settlement high enough to cover the full wind-up value of all the pension promises to employees and pensionable members.

The GMB has previously raised concerns over closures and job cuts, prompting national officer Paul Maloney to write to Health Secretary Patricia Hewitt regarding fears over the possible closure of hundreds of pharmacies.

However, Mr Pessina has been quick to try to allay union concerns, insisting that the deal is about future growth not short-term cost cuttings. He is reportedly keen to grow the business away from the public spotlight, although he has committed to publishing an annual review updating on Boots’ progress.

KKR and Mr Pessina first approached the Boots board in March regarding a £9.7bn (€14.25) offer proposal for the company. Following a rejection from the board, KKR outbid fellow buy-out firm Terra Firma, which had offered £10.8bn (€16.8) for Alliance Boots in partnership with medical charity Wellcome Trust.

If the deal is sealed today it will come less than a year after the group was created through the merger of Boots and drugs wholesaler Alliance UniChem.