The Wellcome Trust, a UK-based charity, has reportedly teamed up with UK buyout firm Terra Firma in an attempt to gatecrash Kohlberg Kravis Roberts’ £10.1 billion (€14.9 billion; $19.8 billion) bid for UK health and beauty chain Alliance Boots.
The board of Alliance Boots will now open its books to the rival consortium, according to media reports. This will provide it with the detailed financial information it needs to put together a firm bid.
KKR, which is acting in conjunction with Boots’ deputy chairman Stefano Pessina, was recently granted access to the company’s books after raising its initial £10 per share offer to £10.40 per share. This would value the retailer at £10.1 billion, making it the largest European leveraged buyout to date.
Terra Firma, which has recently raised a €5 billion fund, is teaming up with one of the UK’s biggest charities to pursue the bid. The Wellcome Trust manages about £13 billion and is the UK’s biggest institutional investor in private equity.
Terra Firma has a limited track record in the retail sector, having concentrated largely on infrastructure deals. Any transaction at this price would be the firm’s biggest to date by some distance.
Celesio, the German owner of UK pharmacy chain Lloyds is also talking to private equity firms about a possible bid, according to reports.
Alliance Boots was formed last year through the merger of retail chain Boots with drugs wholesaler Alliance Unichem.