Booting in

7 February 2006

The UK regulator has decided not to refer the chemist s merger with Alliance Unichem for a lengthy competition enquiry. That raises the bar for private equity groups plotting a counterbid. They will have to offer a big premium to stop the deal going ahead.

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The Office of Fair Trading has given Boots' merger with Alliance Unichem a provisional green light. The regulator said the deal could go ahead if the enlarged company agreed to sell up to 100 shops to address competition concerns.

Apax Partners, CVC and Texas Pacific Group, three private equity groups, are understood to be considering a joint bid for Boots, according to the Sunday Times.

The deal with Alliance is structured to give Boots' investors a 50.2% stake of the combined entity while Alliance's will get 49.8%. Alliance's biggest shareholder, Stefano Pessina, has pledged his 30% shareholding in support of the merger.

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