DESPITE the competitive pressures it faces on the high street, Boots is proving enormously popular.
With two takeover bids to consider, its shareholders are now looking at a take-out price getting on for twice its value when the merger with Alliance Unichem was sealed last summer.
Considering that not much has changed to alter any of the fundamentals or prospects for the company, this is quite a reward for doing very little.

Stefano Pessina and Guy Hands, the two rivals leading their respective bid teams, obviously see something in Alliance Boots that the rest of us have worried about for some time. Not so long ago the markets were concerned that it was tip-toeing into the retail graveyard along with Woolworths as the supermarket giants mopped up their market share.
Boots, of course, has the steady stream of business via the NHS to give it a valuable point of difference and the involvement of the science charity Wellcome Trust is a strengthening factor in Hands' team.

Pessina's 1090p bid with Kohlberg Kravis Roberts has already won the backing of the board only to be trumped by Hands' private equity firm Terra Firma with an indicative offer of 1115p.
The war of words is now in danger of getting nasty with the Pessina/KKR camp accusing Terra Firma of spoiling tactics by putting forward a package with little substance behind it. From Terra Firma's side come questions over the £106m break fee that KKR is said to have negotiated if a rival tops its offer.

There is now talk that the bidding will go even higher with expectations that Pessina and KKR are not prepared to let this one slip. As we report today, shareholders could get their hands on at least 1300p a share.
Given that Pessina is the deputy chairman of Alliance Boots, it has to be hoped that he knows the true value of the company and is not over-paying at this sort of price.

Even so, there must be concern that, as the share price soars, the risk to employees and branches of Boots will only heighten.
THE regulators are hovering over the proposed bids for ABN Amro and posing questions that are adding to an already complicated bid battle. With Barclays poised to announce the terms of its merger, possibly tomorrow, and Royal Bank waiting in the wings, the Financial Services Authority has expressed worries that Barclays would not object to the Dutch regulating any combined group.

The FSA is concerned that in spite of Barclays offer to relocate the head office to Amsterdam, the main focus of the company would remain in Britain.
Tomorrow is likely to be a critical day for all concerned as Royal Bank opens talks with ABN, after seeing Barclays' bid terms. Whether RBS and its consortium partners make an early counterbid is unclear, but RBS chief executive Sir Fred Goodwin has a habit of getting what he wants.

Goodwin's biggest obstacle is the preference of the ABN board to do a deal with Barclays that will give them a share of the spoils and a Dutch head office. However, its passage has been made clearer after the Dutch Central Bank governor Nout Wellink confirmed that he never intended to say that a break-up would be complicated.
With extra firepower on its side, RBS has the muscle to win this battle or, at the very least, force one of its chief UK rivals to pay a full price to bag the prize.

WATER charges are a popular target for disgruntled executives of companies big and small and any move to reduce them is bound to win support. Stories of companies facing increases of as much as 500% some years back remain a sore point for those who believe they are being overcharged and underserviced.
The early move by Scottish Southern Energy boss Ian Marchant to secure a licence to supply businesses with their water echoes similar developments in gas and electricity.

Liberalisation of those markets sparked a price war.
Under little-known changes coming into force next year, Scottish Water will continue to monopolise the domestic market but will set a wholesale price for non-domestic providers. SSE, with its access to reservoirs to produce hydro-electric power, is well-placed to take advantage of the changes.

Marchant, with an eye on shifts in power supplies, will see this as a logical next step.
Opponents have yet to emerge to what may be seen as a step towards full privatisation of Scotland's water industry, a debate that has raged for more than a decade. If it helps to soften up opposition to such a process, then all well and good.

Privatisation would release substantial capital for the public purse. Some would like to see such funds used for education or improving the transport network. The best home for it would be reinvestment in the water industry infrastructure itself to improve its efficiency.