The private equity firm Kohlberg Kravis Roberts & Co (KKR) said on Friday that it was teaming up with Italian billionaire Stefano Pessina to make a takeover bid for Alliance Boots, Britain's largest drugstore chain.
KKR, based in New York, and Pessina, who is the deputy chairman of Alliance Boots and its largest shareholder, made a friendly approach worth ?10.00 (US$19.11) in cash for each Alliance share, they said in a statement on Friday. The offer is worth about ?9.7 billion (US$18.7 billion).
There is no certainty that the approach will result in a firm offer and the parties said they had yet to have a closer look at the company's books, which could take three weeks.
This week, Bernard Arnault, France's richest man, and the private equity firm Colony Capital of Los Angeles, took a minority stake in Carrefour, the world's second-largest retailer, behind Wal-Mart Stores.
Shares of Alliance Boots rose ?1.15, or 14 percent, to ?9.30 in London on Friday, giving it a market value of about ?7.8 billion. The potential offer values the shares at 23 percent above their closing price on Thursday.
KKR and other private equity firms said this year that they were considering a bid for J Sainsbury, one of Britain's largest supermarket chains, in what could become the biggest private equity acquisition in Europe.
Britain's Takeover Panel gave them until April 13 to say whether they would make a bid.
Retailers are an attractive investment for private equity firms because they usually have a steady income and own real estate against which buyout firms can borrow money to finance the takeover.
Alliance Boots was created last year through the ?7 billion merger of the Boots Group, which sells products like shower gels and prescription medicines, and Alliance Unichem. The combination created a retailer with about 2,600 stores in Britain and 350 outlets in Europe and Asia.
KKR and Pessina, 65, who holds about 15 percent of Alliance Boots, said they wanted to work with Alliance's management to build "a global leader in the health care services and beauty industries."
Since the merger, Alliance Boots has been giving its Alliance outlets the Boots name, added products and refurbished stores to increase earnings.
Profit rose 10 percent, to ?193 million, in the six months that ended Sept. 30, from ?175 million in pro forma net income for the combined group in the same period a year earlier.
Alliance Boots said that it was cautious about consumer spending this year. The company competes with supermarket chains, like Tesco, which have expanded into health care and beauty products.
Pessina was previously an executive deputy chairman of Alliance Unichem. He joined Alliance Unichem's board in 1997, when Unichem merged with Alliance Sante, the pharmaceutical retail company he established in Italy in 1977.
Boots was founded in 1849 by the Boot family, which sold herbal remedies from their small store in Nottingham, a city in the middle of England.
The family business expanded rapidly as the Boots stores bought products in bulk and sold them at reduced prices. In 1900, the family had 181 stores; by the 1930s, more than 1,000 outlets sold drugs, cosmetics and the company's own sun care brands.
KKR has bought about 145 companies with a combined value of about US$274 billion since it was established in 1976. Its other investments in the retail industry include stakes in SunGard Data Systems, the computer software company, and Toys "R" Us.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
‘NO DISRUPTION’: A US trade association said that it was ready to work with the US administration to streamline the program’s requirements and achieve shared goals The White House is seeking to renegotiate US CHIPS and Science Act awards and has signaled delays to some upcoming semiconductor disbursements, two sources familiar with the matter told reporters. The people, along with a third source, said that the new US administration is reviewing the projects awarded under the 2022 law, meant to boost US domestic semiconductor output with US$39 billion in subsidies. Washington plans to renegotiate some of the deals after assessing and changing current requirements, the sources said. The extent of the possible changes and how they would affect agreements already finalized was not immediately clear. It was not known