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date: 20 April 2007

embargo: immediate

Questions for Boots private equity bid

TUC General Secretary, Brendan Barber, has today (Friday) written to both the current Boots board and the preferred private equity bidders for the company to say they have a duty to spell out their plans to both workforce and customers. The text follows.

Brendan Barber said: 'This will be Britain's biggest ever private equity deal. Many such takeovers have hit staff and customers hard as the new owners seek to make the biggest and quickest possible buck at the expense of the long term. Only yesterday the new owners of Airwave closed the staff pension scheme within an hour of taking over the company.

'My letter gives both the current board and the preferred prospective new owners the chance to set out their plans. Staff and customers, including the NHS, need to know whether they plan to invest in Boots, consult with the workforce and honour the terms and conditions already enjoyed by Boots staff - or whether the costs of servicing a debt financed takeover will mean a worse deal.'

Usdaw General Secretary John Hannett said: 'Usdaw is seeking an urgent meeting with the KKR bid team to ask some tough questions on behalf of our members in Alliance Boots who have expressed real anxieties about their long term job security and pensions if a bid is accepted.

'Our Alliance Boots members can rest assured that from day one we will be scrutinising the impact of this huge bid on them as our members are not concerned about who profits from a sale but whether they will continue to have a job to support their families and can retire with a decent pension.'

Extract from letters to Sir Nigel Rudd of Boots and Stefano Pessina of KKR

The prospect of a takeover of Boots in the UK's biggest ever private equity deal will alarm both staff and customers. The sheer size of the deal and the role of Boots as one of the NHS's largest suppliers means that this potential takeover has wide public interest implications.

Private ownership will dramatically reduce requirements on the company's owners to be open about their activities and plans.

Some private equity takeovers have resulted in redundancies, pension closures, asset sell-offs and the enrichment of the new owners at the expense of investment in the long-term viability and security of the company.

If the sale goes ahead both the current board and the new owners will need to assure staff and customers that this will not be the future of Boots, and that they will not hide behind reduced reporting requirements.

The current board need to say what safeguards they are seeking from new owners and the prospective new owners need to answer these questions about the future of the company. Boots has a loyal workforce and long-standing relations with Usdaw. They should not be kept in the dark, and must be fully involved in discussions.

1. What are your plans for jobs?

2. What commitments are you prepared to make to safeguard job security and the terms and conditions of staff including their pension arrangements?

3. What are your plans for the shops and other parts of the business?

4. How much debt will be involved in any takeover?

5. Will there be asset disposals?

6. What consultations will there be with the workforce on your plans?

7. Do you have any plans for new investment in the business?

8. What implications will there be for the NHS given that Boots is one of its largest suppliers?

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Contacts:

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Liz Chinchen T: 020 7467 1248; M: 07778 158175; E: media@tuc.org.uk

Press release (700 words) issued 20 Apr 2007