Kohlberg Kravis Roberts & Co. and Italian billionaire Stefano Pessina have reportedly raised their bid for Alliance Boots Plc to 10.1 billion pounds or $19.8 billion, and the U.K.’s largest drugstore chain has signaled that it may discuss a deal. The offered price is 28 percent more than the close on March 8, the day before an approach was disclosed. Th group has stated that its board has agreed to grant KKR and Stefano Pessina a limited period to undertake confirmatory due diligence.
However, the revised Pessina-KKR proposal is subject to due diligence and a recommendation from Alliance Boots’ board. Alliance Boots was established last year in a merger that combined about 2,400 U.K. stores and a wholesale drug supplier to more than 125,000 pharmacies and hospitals. This prospective takeover, if reached, would be Europe’s biggest leveraged buyout.
Now the only question is whether Boots will end up being owned by KKR/Pessina or whether another bidder or bidders, which could also be from private equity, now emerges. At present the door is open for a rival bidder to emerge.
According to reports, Blackstone had been studying a possible counter-offer. It is also believed that Blackstone was taking help of potential advisers about an approach for Alliance Boots. In the meanwhile, earlier this week it surfaced that Terra Firma, Guy Hands’s investment private equity firm, has also been evaluating a possible offer. However, it was struggling to find an investment bank that was not before now involved in a retail deal to both advise it and help finance an offer.
