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If you hear cheering in the City today it will be the sound of investment bankers rejoicing at what looks set to be the first successful private equity bid for a FTSE 100 company. Regardless of whether they’re in on the Alliance Boots bid, they all want to see it go through to encourage others.
And it looks like it will. This morning KKR and Stefano Pessina raised their offer for Alliance Boots from £10 to £10.40. In return, Boots is giving them access to the books, not that Pessina needs it. The increase, which includes the 19p dividend, looks a little miserly but it’s probably enough. There isn’t much sign of a rival offer and it is notable that the Boots share price has not shot through the new offer price.
A successful take-private of Boots will not necessarily encourage others – not all FTSE 100 companies have an executive director able and willing to throw in 15 per cent of the shares behind a bid and not all have as well-funded a pension scheme – but it should help.
It is a big pay-day at New Star Asset Management. The directors are selling £210m-worth of shares (founder John Duffield is almost halving his stake). I think they have to sell some in order to get the free float up ahead of moving from Aim to the main list. They are also paying themselves and other shareholders a huge dividend, the net effect of which for Duffield is a cheque of nearly £160m. And well-deserved it is, too.
Keep an eye on Vodafone. It is having an investor day which runs from 9 this morning to 5pm. It can’t be going very well: the shares are down more than 4 per cent already. So far, the highlights have included news of a tie-up with Asda similar to Tesco’s very successful one with O2 and an admission by the UK boss that they have struggled here and had to sacrifice margins to grow. There has been more talk about making mobile internet a reality and Vittorio Colao, the new deputy CEO and European head, kept his remarks nice and dull. Which is probably just how the press team will have wanted it after all the talk that he was being brought in to succeed Arun Sarin. The Q&A session just after 4pm may yield more.
Also, will BA intervene in TPG’s bid for Iberia? You have to think it would like to but much may depend on which operator TPG has teamed up with. BA’s 10 per cent stake puts it in a reasonably good position.
Rumour of the day: Neil Hume on our markets desk is hearing that Adecco may be looking at Hays. And Scottish & Newcastle has not fallen back after its spectacular rise yesterday, despite no statement still from the company.
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