Highly conditional offer received
Health and beauty giant Alliance Boots has received a preliminary takeover approach.

The company said it was 'highly conditional', and would not automatically result in an offer.

Boots issued a statement after its shares surged by as much as 4.9 per cent to their highest point since mid-1999. City traders speculated that a bid for the company could come in at£10 a share.

City sources were convinced the approach would have come from private equity firms that have focused on ever-bigger retail targets. Pali International analyst Nick Bubb said: ' It's almost certainly private equity. It ticks boxes in terms of things like cash flow, but whether the management will want to do a deal is unlikely.'

Alliance Boots overcame competitive Christmas trading conditions to notch up a record third quarter revenue rise at its core health and beauty business.

The company, created last year when retailer Boots and wholesale giant Alliance UniChem merged, posted a total UK retail sales uplift of 2.5 per cent and like-for-likes ahead 1.5 per cent.

Speculation about a possible takeover bid for supermarket Sainsbury's by private equity firms CVC Capital Partners, Kohlberg Kravis Roberts, Blackstone and TPG continues to mount.