The board of high street retailer and drug wholesaler Alliance Boots have rejected a #9.7 billion takeover bid from its deputy chairman Stefano Pessina and private equity firm Kohlberg Kravis Roberts.
The board said the #10-a-share offer "did not reflect the fundamental value of the company or the attractive prospects, opportunities and synergies available to Alliance Boots".
Directors said the offer would not be recommended to Alliance Boots shareholders.
The Alliance Boots board met yesterday to consider the bid in an emergency meeting, without Mr Pessina or his fellow director and long-term partner Ornella Barra being present.
The rejection of the "friendly approach" comes less than nine months after the creation of Alliance Boots through the #7.8 billion merger between Boots and Alliance UniChem in July last year.
The company’s shares rose more than 8% during the day - or 75p - and were trading at 1005p immediately after the rejection of the offer, suggesting investors were expecting a higher bid to emerge.
Mr Pessina owns a 15% stake in Alliance Boots but is reportedly keen to take the group private to grow the merged company away from the public spotlight.
Alliance Boots has about 2,600 healthcare outlets in the UK, plus 400 overseas pharmacies in Norway, the Netherlands, Thailand, Italy and Ireland.
The group’s healthcare and pharmaceutical distribution operation spans 14 countries.