Solicitors used for smooth Boots acquisition

Solicitors are being used to mediate between private equity group Kohlberg Kravis Roberts (KKR) and pension fund trustees of Boots to ensure that the takeover of Alliance Boots goes through smoothly.

According to the Telegraph, this action has been made necessary after trustees threatened to block the £11.1 billion takeover bid in the High Court, the reason being that KKR's offer of £900 million to contribute to the pension scheme is too low.

The pension scheme has 66,000 members and it was estimated that £100 million more was necessary.

Although a stoppage by the High Court would be extremely unusual, taking the matter to court would delay proceedings. John Ralfe, a former head of corporate finance at Boots, said that an attempt by the trustees to put a halt to the takeover through legal action would be unprecedented. It has never been seen before by courts in Britain and Northern Ireland.

"The trustees can be unhappy and huff and puff about it but it is only the judge who has the power to stop the deal," said Mr Ralfe. "The deal will happen whether they like it or not, unless they can persuade the judge they are being prejudiced against. It would be a difficult case to argue. It is an unprecedented situation and new territory. We have not had a situation where the pension scheme and a company's creditors are in the process of filing objections to the court."

A spokesman for the Boots pension fund told the Telegraph: "No decision has been taken yet but we are continuing to explore all options available to our members to ensure that they receive their full benefits and entitlements, now and in the future."

"We hope that both sides will continue to work constructively towards a sensible solution as it would seem both parties are not actually that far apart," a spokesman for KKR said.

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