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| Boots rejects £9.7bn bid approach | |
| (about 12 hours later) | |
| Alliance Boots bosses have rejected a proposed £9.7bn ($18.7bn) offer from a private equity group, saying the suggested price was too low. | |
| US-based KKR had indicated a possible offer of £10 per share, but Boots said this did not reflect the value of the UK chemist and drugs wholesaler. | |
| The "friendly approach" had the backing of Italian billionaire Stephano Pessina - who controls a 15% stake in Boots. | |
| Boots' shares have surged since talk of a bid emerged on Friday. | |
| By close of trade on the London Stock Exchange, shares in the healthcare group were 66.5 pence, or 7.15%, higher at 996.5p. | |
| They would look pretty foolish if they simply walked away Robert PestonBBC business editor Read Robert Peston's blog Check Boots' share price | |
| The board said that the offer did not reflect "the fundamental value of the company or the attractive prospects, opportunities and synergies available". | |
| Bidding war? | Bidding war? |
| BBC business editor Robert Peston said that the rejection was expected. | |
| "The ball is firmly back in the court of KKR and Pessina," he said. | |
| "They would look pretty foolish if they simply walked away, so I would therefore expect that when they search down the back of their sofa, they will find that they actually have a few hundred million pounds more they could spend on buying Alliance Boots." | |
| Trade unions have warned that selling the group to a private equity firm could lead to "asset-stripping". | |
| "Boots is in for the same punishment that other companies have had - asset stripping, looking at property portfolios, flogging them off and running away with bags of cash," said senior GMB organiser Paul Maloney. | |
| Nottingham-based Alliance Boots is best known in the UK for its 2,600 Boots the Chemist shops on the High Street. | |
| But since its £7bn tie-up with Alliance UniChem last year it is now also a major drugs wholesaler, with a 40% market share, supplying more than 125,000 pharmacies, health centres and hospitals. | |
| BBC business editor Robert Peston said that the fact that one of Boots' key investors was working with KKR on the offer "massively increased the likelihood" of it going through. | BBC business editor Robert Peston said that the fact that one of Boots' key investors was working with KKR on the offer "massively increased the likelihood" of it going through. |
| Other analysts agreed - with many predicting the Alliance Boots board would be keen on other potential buyers coming forward, leading to a bidding war for the company. | Other analysts agreed - with many predicting the Alliance Boots board would be keen on other potential buyers coming forward, leading to a bidding war for the company. |
| KKR is the world's biggest private equity firm and was recently part of a consortium involved in the $45bn (£22.9bn) buyout of US utility TXU Energy - the world's biggest private equity deal. | KKR is the world's biggest private equity firm and was recently part of a consortium involved in the $45bn (£22.9bn) buyout of US utility TXU Energy - the world's biggest private equity deal. |