Just as it appeared that the race to secure a takeover deal for Alliance Boots was over, a spanner has hit the works for Kohlberg Kravis Roberts (KKR) in the guise of a counter bid from the Terra Firma consortium.
As predicted by cosmeticsbusiness.com this morning, Terra Firma, together with the Wellcome Trust and HBOS, has offered 1,126 pence per share for the pharmacy chain.
Alliance Boots has yet to respond to the offer, but should the bid be accepted, shareholders would receive 1,115 pence per share (£10.8bn) after KKR's break fee is taken into account.
Should the deal go ahead it will be Europe's largest ever private equity fund spend.
Boots announced this morning that its independent directors had agreed to KKR's takeover bid at a price of 1,090 pence in cash per share, putting a value of £10.6bn on the deal. KKR has stated its bid represents a “long-term commitment to develop further Alliance Boots' existing businesses both in the UK and overseas.”
Sir Nigel Rudd, chairman of Alliance Boots said of the deal: "I have been privileged to chair one of this country's greatest retail brands and to have put in place the management team that has put this company back on the road to success. The formation of Alliance Boots created a highly valuable business and this offer reflects that I am delighted that the Board has been able to achieve such good value for shareholders.”"
Shares in Alliance Boots soared 5% this morning to 11.08p in the wake of the announcement and amid speculation that the bidding war could push prices still higher.