Stefano Pessina and Kohlberg Kravis Roberts looked to be closing in on securing a deal for Alliance Boots after the drug wholesaler and retailer opened its books following a revised possible offer of £10.40 per share.
The new proposal, which values the company at about £10.1 billion (€14.88 billion) had been widely expected, although some had suggested that it could be as high as £10.60. It followed an initial approach this month of £10 a share.
Due diligence is expected to take two to three weeks, which could lead to a formal recommendation to accept an offer as early as the end of April, just nine months after Alliance Boots came into being. The company's response to the revised proposal will be carefully watched as it seeks to reassure investors over potential conflicts of interest in the boardroom.
Investors have applied pressure on the company to provide details of why the group could not do as a public company what Mr Pessina, who is the company's largest shareholder and deputy chairman, could do in taking the company private.
Ian Cheshire, chief executive of B&Q, said the raised offer looked attractive but said that the insider element of the deal was putting pressure on the board. "The deal is an interesting one. It puts a public board in a slightly difficult position when effectively there is only one bid on the table," he said.
"So I think it really depends on whether another party emerges but it is getting to be, by historic standards, quite good value. So there is a chance for it, but I wouldn't say it is a done deal yet."
One dealmaker said Mr Pessina's commitment to KKR did not make counter approaches impossible. "It could be that a consortium could come in and bring in, say, a really experienced wholesaling guy from the US. So it is not impossible."
Richard Ratner of Seymour Pierce said: "Now the board can save face having rejected the previous offer."
However, Clive Black of Shore Capital said: "I would suggest that institutional investors think very carefully about selling at this price."
