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Alliance Boots plc - Update on 12th March

12 March 2007

On 9 March 2007, the Board of Alliance Boots plc ("Alliance Boots" or the "Company") announced that it had received a preliminary and highly conditional proposal regarding a possible offer for the Company.

Later that day, Kohlberg Kravis Roberts & Co. Ltd. and Stefano Pessina confirmed that they had made the approach, acting in concert, and that their proposal (the "KKR Proposal") had indicated a possible offer price of 1,000p per Alliance Boots share subject, inter alia, to due diligence and a recommendation from the Board of Alliance Boots.

The Board of Alliance Boots met today to consider the KKR Proposal.  In light of their connections with the KKR Proposal, neither Stefano Pessina nor Ornella Barra attended the Board meeting.

Having reviewed the KKR Proposal in detail with its advisers, the Board of Alliance Boots does not believe it reflects the fundamental value of the Company or the attractive prospects, opportunities and synergies available to Alliance Boots following the very recent completion of its merger.  As a result, the Board of Alliance Boots has today informed Kohlberg Kravis Roberts & Co. Ltd. and Stefano Pessina that the KKR Proposal cannot be recommended to the shareholders of Alliance Boots.

Note 7 of Rule 2.4 of the City Code on Takeovers and Mergers requires the Company to point out that this statement is being made by the Company without prior agreement with the potential offeror and that there can be no certainty whether any offer will be made.

For further enquiries, contact:

 

Alliance Boots plc  
Gerald Gradwell/Chris Laud (Investor Relations)
Donal McCabe (Media)
Tel: +44 (0) 20 7138 1118
Tel: +44 (0) 20 7138 1164
Goldman Sachs International
Simon Dingemans
Tel: +44 (0) 20 7774 1000
Finsbury
James Murgatroyd
Tel: +44 (0) 20 7251 3801

 

Goldman Sachs International, which is authorised and regulated in the United Kingdom by The Financial Services Authority, is acting for Alliance Boots in relation to the matters described in this announcement and is not advising any other person and accordingly will not be responsible to any person other than Alliance Boots for providing the protections afforded to the customers of Goldman Sachs International or for providing advice in relation to the matters described in this announcement.

Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of the Company, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of the Company, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of the Company by the offeror, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk open link in a new window.

"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.

Forward Looking Statements

This letter includes 'forward-looking statements' under United States securities laws.  In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Alliance Boots group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Alliance Boots group's, present and future business strategies and the environment in which the Alliance Boots group will operate in the future. As a result, the Alliance Boots group's actual future financial condition, performance and results may differ materially from the plans, goals and expectations set out in the Alliance Boots group's forward-looking statements contained in this letter or any other forward-looking statement it may make. Except as required by the UK Listing Authority, the London Stock Exchange, the City Code, or by law, Alliance Boots plc does not undertake any obligation to update any of the forward-looking statements contained in this document or other forward-looking statements it may make.