Boots private take-over bid set to take place

By Louise Prance

- Last updated on GMT

Related tags: Private equity firm, Kohlberg kravis roberts, Stefano pessina

The UK's leading health and Beauty store, Alliance Boots, is due to
be sold into the private sector, following the backing of board
members of a £10.6bn take-over bid.

If carried out, the take-over bid by Kohlberg Kravis Roberts (KKR) and the company's deputy chairman Stefano Pessina will be the biggest European acquisition by a private equity firm - highlighting the importance Boots holds within the cosmetics and personal care industry. The bid for the company has become heated, with rival investors, such as private equity firm Terra Firm and medical charity, The Wellcome Trust, offering similar amounts - news that has sent shares in the company soaring in price. Following a £7bn merger with chemist chain Alliance Chem last year, the Boots chain has become a highly valuable company, with over 2,600 stores in the UK and now having over 400 overseas outlets in Italy and Thailand. Indeed, the company has also made strong ties in the US, retailing many of its own brand cosmetic brands in the well-known Target department stores, expanding the No7 range across stores in Canada only last month. Industry reports state that with Pessina behind the take-over bid it will almost certainly take place. The deputy chairman has allegedly stated that he is concerned that the company is being exposed to the media interference and, through going private, will escape the public spotlight. Instead he wants to 'accelerate the development of Alliance Boots in order to meet the challenges and opportunities that are faced and to build a successful global pharmacy-led healthcare and beauty group'. However, with Pessina, 65, expected to net over £1bn from the proposed acquisition before his 70th​ birthday, industry observers say it would be one of the fastest billions ever made by a private individual. KKR previously applied for a take-over in March, but was rejected because the offer was to low. Insider concerns are likely to be raised that private ownership could cause job uncertainty for the many staff working for the company, whilst making a huge profit for the private investors.

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