) represents 10.40 ($20.37) per share in cash, up from the of 10 ($19.
59) per share. That bid was rejected by the board on March 12 as not reflecting the retailer's fundamental value and prospects. Alliance Boots closed down 0.
5 pence (1 cent), or 0.1%, at 10.26 ($20.
20) on Friday in London. The company said its board had "agreed to grant KKR and Stefano Pessina a limited period to undertake confirmatory due diligence," adding that a further announcement about the bid would be made "as and when appropriate." Meanwhile, with the increasing likelihood that KKR will help Pessina buy Boots, shares in supermarket J Sainsbury ) have suffered, since KKR has also been considering a bid for supermarket chain together with CVC Capital Partners and The Blackstone Group.
(See: " .") Sainsbury's ended the day 0.5 pence (1 cent), or 0.
4%, lower at 549.5 pence ($10.75) on Friday in London.
Don't assume, however, that KKR doesn't have deep enough pockets to buy more than one British blue chip. The acquisitive private equity fund recently announced a $7.3 billion bid for U.
S. discount retailer Dollar General ) and last month, in conjunction with other firms, launched a $32 billion offer for the utility company TXU ). If completed, that will be the largest private-equity deal ever.
(See: ) Also, there is continuing speculation among the British press that Alliance Boots could yet receive rival offers from private-equity rivals Blackstone Group and Britain's Apax Partners. Analysts said the board is probably hoping rival suitors will emerge, evident in the fact that it has yet to make any indication that it will recommend the revised proposal. Either way, Pessina's presence in the KKR bid is crucial.
He is the driving force in Alliance Boots' wholesale strategy, along with Ornella Barra, the company's wholesale and commercial director and Pessina's partner of 24 years. The Italian billionaire, who owns 15% of Alliance Boots, was the founder of pharmacy leviathan Alliance UniChem, bought in July 2006 by the British health and beauty chain Boots for $12 billion. Reports say investors in London are somewhat irked that Pessina, who had a vision for long-term synergies and healthy returns through the melding of Boots and Alliance UniChem, has now decided to cut loose from the company with the help of a private equity firm and realize those returns for himself.
The Associated Press contributed to this report.
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