A cross-Atlantic bidding war erupted on Friday for Europe's biggest pharmacy chain Alliance Boots as US and British private equity groups launched rival cash bids approaching 11.0 billion pounds. A take-over backed by either Terra Firma or Kohlberg Kravis Roberts (KKR) would represent Europe's biggest buyout by a private equity firm.
A consortium headed by British group Terra Firma tabled an indicative bid worth 10.78 billion pounds (15.87 billion euros and 21.60 billion dollars) for British company Alliance Boots.
The offer trumped an improved bid by US private equity group KKR which the Alliance Boots board had accepted earlier Friday. KKR, which is joined in its take-over by the executive deputy chairman of Alliance Boots, Stefano Pessina, offered 10.6 billion pounds. Pessina owns 15.05 percent of Alliance Boots, which was created last year by the British merger of pharmacy chain Alliance UniChem and health and beauty retailer Boots.
It would also make the newly-formed Alliance Boots the first company to fall into private hands while being listed on London's prestigious FTSE 100 share index. The share price in Alliance Boots surged 8.05 percent to 1,134.00 pence in late Friday morning trade to top the FTSE 100. The capital's prestigious share index was 0.72-percent higher at 6,487.20 points.
Terra Firma's indicative offer was worth 1,126 pence for each Alliance Boots share, while KKR proposed 1,090 pence. Should Alliance Boots ditch KKR in favour of Terra Firma, the latter would have to pay compensation to its rival. Terra said this would reduce its offer to 1,115 pence per share, but would still beat KKR's offer. Alliance Boots has yet to respond to the move by Terra Firma, which is led by British financier Guy Hands.