The battle for control of Alliance Boots continues to heat up with the news that a consortium led by private equity firm Kohlberg Kravis Roberts has raised its bid to buy the firm to £11.39, valuing the group at £11 billion.
The new offer has trumped an indicative bid of £11.26 from a rival consortium made up of private equity rival Terra Firma and the Wellcome Trust and comes after KKR and Alliance Boots deputy chairman Stefano Pessina bought 49.7 million Alliance Boots shares yesterday at the increased cash price and a further 51.8 million shares this morning. Mr Pessina already holds a stake of 15.05% in the UK-based drugs wholesaler and retailer and health and beauty chain and the consortium now owns over 26% of Alliance Boots.
Terra Firma and its founder Guy Hands are scheduled to meet Alliance Boots executives today after the company agreed to give it access to its books, but the KKR consortium’s move has been described by analysts as a knockout blow to the former’s bid. For Terra Firma to trump this latest offer, it would also need to cover a £105.9 million break-up fee Alliance Boots has agreed with the KKR/Pessina consortium.