Until the check clears, it's really not a done deal. That's definitely the case with the buyout of Alliance Boots, the UK's largest drugstore chain.Originally, it looked like KKR would be the buyer, along with Stefano Pessina (who is the chairman of Alliance and owns 15% of the company). But, private equity firm Terra Firma Capital Partners has a better offer: $21.8 billion. The firm also has the financial support of the Wellcome Trust and HBOS PLC.
Interestingly enough, a few hours before this bid, KKR and Pessina upped its own bid.
Yes, it must be nice for Alliance shareholders. In fact, based on the activity in the stock, the betting is that there will be even more bids.
Alliance does have a serious footprint, with about 3,100 stores, as well as a thriving wholesale business.
Oh, and yes, there are opportunities to cut costs. And, with the valuation getting frothier, I think even more employees will lose jobs so as to pay off the debt the private equity players will load onto Alliance.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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