Boots yields to increased KKR bid(2)

The UK retailer will open its books to Kohlberg Kravis Roberts, after the buyout firm increased its bid to £10.40 per share or £10.1 billion.

UK health and beauty chain Alliance Boots said today that it would open its books to deputy chairman Stefano Pessina and Kohlberg Kravis Roberts, after the pair came back with an improved £10.40 per share bid.

An Alliance Boots pharmacy

KKR and Pessina have increased their offer from £10.00 per share to £10.40 per share, valuing Boots at £10.1 billion (€14.9 billion; $19.8 billion). Any deal at this price would be the largest European buyout on record, and would also mark the first time one of the UK’s 100 biggest listed companies has succumbed to a private equity-backed bid.

The board has now granted KKR “a limited period to undertake confirmatory due diligence”.

The buyout firm had an indicative £10-per-share offer rejected by the Boots board on March 12, but has waited more than two weeks to increase its bid.

Other rival firms have since been linked with a possible offer for Boots, including UK-based Terra Firma and Apax Partners. Yesterday the Daily Telegraph newspaper reported that The Blackstone Group was also mulling a bid.

Reporting its results earlier this week, Boots was in bullish mood, revealing a small increase in like-for-like sales and a £65 million re-branding of the pharmacies taken on as part of last year’s merger with Alliance Unichem.