11:31am UK, Friday April 20, 2007

A bid battle has broken out for Alliance Boots.

A second private equity group - Terra Firma - stepped into the arena, offering £10.8bn for the company.

180 Allliance Boots

Bid confirmed

Shares in the group have soared as investors pitch in on hopes of profitable returns.

The board of Boots only hours earlier accepted a £10.6bn offer from a consortium from private equity firm Kohlberg Kravis Roberts, led by Stefano Pessina, the deputy chairman of Alliance Boots.

Mr Pessina and his group had raised their offer from £10bn to £10.6bn.

Mr Pessina is the Italian businessman who created Alliance Boots through the merger of his wholesale company Alliance UniChem with the High Street chain.

He is also the group's biggest shareholder.

Either deal, if it goes through, will mean the biggest leveraged buyout in the UK and Alliance Boots will be the first FTSE 100 company to be taken over by private equity.
 
These latest offers come barely a week after a private equity consortium led by CVC Capital Partners ditched its plans to bid for the UK's third largest supermarket group, Sainsbury's.