UK - New entrant to begin battle for Boots?

sarah
02 April 2007

Tweet
Facebook
LinkedIn
Google plus
Send to

Market sources suggest that German firm Celesio, a continental rival to the Alliance Boots pharmaceutical chain, has approached other buyout groups about the possibility of teaming up to launch a competing takeover bid for the listed UK retailer. Boots opened up its books to KKR on Friday following its £10bn offer after an earlier deal was rejected. Permira, CVC, Blackstone and Texas Pacific Group are amongst the names thought to be eyeing a rival bid for Boots with Celesio.

It is understood that Celesio, which took 2006's Alliance Boots merger to the Competition Appeal Tribunal, would split up the company. Rival buyout groups would find a deal with Celesio attractive due to the synergies to be extracted from Celesio's 2,100 chemist outlets in the UK which trade under the Lloyds brand. It is unlikely, however, that rival offers will be able to match KKR's bid due to the substantial advantage it has thanks to the support of deputy chairman Stefano Pessina and his 15% stake. Additionally a takeover by Celesio would probably spark interest from the competition authorities.