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| Boots backs £10.6bn takeover bid | Boots backs £10.6bn takeover bid |
| (10 minutes later) | |
| The board of High Street chemist and drugs firm, Alliance Boots, has backed a £10.6bn takeover bid which would take the group into private ownership. | The board of High Street chemist and drugs firm, Alliance Boots, has backed a £10.6bn takeover bid which would take the group into private ownership. |
| The decision came after private equity firm Kohlberg Kravis Roberts (KKR) and Boots' deputy boss Stefano Pessina upped their offer to £10.90 per share. | The decision came after private equity firm Kohlberg Kravis Roberts (KKR) and Boots' deputy boss Stefano Pessina upped their offer to £10.90 per share. |
| If supported by Boots shareholders it would be by far the biggest UK acquisition by a private equity fund. | If supported by Boots shareholders it would be by far the biggest UK acquisition by a private equity fund. |
| The offer price was more than expected, said BBC business editor Robert Peston. | The offer price was more than expected, said BBC business editor Robert Peston. |
| Rival suitor, the private equity firm Terra Firma, said it had not made a decision yet whether to open a bidding war for the chain. | Rival suitor, the private equity firm Terra Firma, said it had not made a decision yet whether to open a bidding war for the chain. |
| Unions are bound to complain that there'll be job insecurity for Boots' staff and fat profits for KKR Robert PestonBBC Business Editor Check Alliance Boots' share price | |
| It said that its consortium, which includes medical charity the Wellcome Trust, had now been joined by UK bank HBOS, and that it had made an indicative offer at £10.85 earlier this week. | It said that its consortium, which includes medical charity the Wellcome Trust, had now been joined by UK bank HBOS, and that it had made an indicative offer at £10.85 earlier this week. |
| News that it had not surrendered pushed shares in Boots up 5.5% in early Friday trading to £11.08. | |
| Takeover debate | Takeover debate |
| Alliance Boots is best known in the UK for its 2,600 Boots the Chemist shops on the High Street, but it also has 400 overseas outlets in countries including Thailand and Italy. | Alliance Boots is best known in the UK for its 2,600 Boots the Chemist shops on the High Street, but it also has 400 overseas outlets in countries including Thailand and Italy. |
| The group, which was created in a £7bn tie-up with chemist chain Alliance Unichem last year, supplies more than 125,000 pharmacies, health centres and hospitals. | The group, which was created in a £7bn tie-up with chemist chain Alliance Unichem last year, supplies more than 125,000 pharmacies, health centres and hospitals. |
| Alliance Boots chairman, Sir Nigel Rudd, said he was "delighted that the board has been able to achieve such a good price for shareholders". | |
| "The formation last year of Alliance Boots created a hugely valuable business and this offer reflects that," he added. | |
| KKR first made an approach in early March, but was rebuffed because the offer price was too low. | KKR first made an approach in early March, but was rebuffed because the offer price was too low. |
| But the fact that it had the backing of Mr Pessina, Boots' billionaire deputy chairman who already owns 15% of the shares, made it likely the deal would eventually be accepted by the board. | But the fact that it had the backing of Mr Pessina, Boots' billionaire deputy chairman who already owns 15% of the shares, made it likely the deal would eventually be accepted by the board. |
| It is thought that Mr Pessina wants to take Boots private to enable it to grow away from the public spotlight. | It is thought that Mr Pessina wants to take Boots private to enable it to grow away from the public spotlight. |
| The offer is 33.7% higher than the price of Boots shares the day before the first approach was made. | The offer is 33.7% higher than the price of Boots shares the day before the first approach was made. |
| A takeover would reignite the debate about whether ownership by private equity was good or bad for British companies, Mr Peston said. | A takeover would reignite the debate about whether ownership by private equity was good or bad for British companies, Mr Peston said. |
| "Unions are bound to complain that there'll be job insecurity for Boots' staff and fat profits for KKR. | "Unions are bound to complain that there'll be job insecurity for Boots' staff and fat profits for KKR. |
| "Whereas Stefano Pessina will probably argue that Alliance Boots's prospect for growth would be better as a private company - sheltered from the interference of shareholders and the media." | "Whereas Stefano Pessina will probably argue that Alliance Boots's prospect for growth would be better as a private company - sheltered from the interference of shareholders and the media." |