UK - Boots deal encounters up to £1bn unforeseen pension costs

KKR's buyout of Alliance Boots has encountered a setback in the form of an extra £1bn demanded by the trustees of its pension fund. The pension fund was reported to have a surplus just days earlier. Yesterday, the Pension Regulator called on trustees to be more conservative in their assessment of pension funds at the time of takeovers and it is thought this could be behind the demands of Alliance Boots trustees for an upfront payment from KKR. Experts believe KKR will settle on paying £500m into the fund to secure the deal.