11 June 2007
KKR, the prospective buyers of Boots are still no closer to a
deal with pension trustees, as the £11bn takeover deal
looms.
In the last few days, a series of meetings have been held but so
far, both parties have been unable to reach an agreement.
The major stumbling block appears to be over the current scheme
funding shortfall and provision to cover future payouts. The
trustees believe the current funding shortfall is around
£305m. The trustees want KKR to make an initial lump sum
payment of at least this amount, as well as making provision to
cover future payments, thus bringing the total amount to
£1bn.
KKR disagree with the trustee's assumptions and have instead
offered to pay cash of £240m spread over a number of years
and provide a further £600m of security.
