UK union anger at Boots' windfall
UK union leaders attacked a £6.5m (€9.58m) windfall today after it was revealed that the boss of Alliance Boots will net the multi-million payout following the sale of the retail and pharmaceutical giant.
Boots chief executive Richard Baker is set to scoop £6.5 million from cashing in Boots shares when the firm is sold to its deputy chairman Stefano Pessina and US private equity backers Kohlberg Kravis Roberts.
Fellow Boots director Scott Wheway will also benefit to the tune of £1.2m (€1.77m) in shares when the £11.1bn (€16.35bn) deal goes through, with a raft of other directors also set to gain as share option schemes are cashed in.
Mr Pessina – a 15% shareholder in the firm – will sell a third of his stake, scooping around £500m (€737m), although he will reinvest the remaining two thirds in the company after the deal.
The GMB trade union today voiced anger at the level of the payouts, saying they were “obscene and unacceptable”.
Paul Maloney, national officer of the GMB, said: “The private equity industry is first and foremost a mechanism for the multi-millionaire elite to enrich themselves at the expense of the rest of us.”
He added: “Since Boots does £2bn (€2.95bn) of business with the NHS, much of this money is flowing direct from the taxpayer.”
News of the payouts, outlined in the scheme of arrangements of the deal, also come as fears grow over job cuts at the group under private equity hands.
Buyers Mr Pessina and KKR stressed their strategy for the group involved “no new plans for short-term cost cutting”.
But Boots said in March it would axe 300 jobs at its Nottingham factory and trade unions have raised concerns over further possible job losses.
The 145-page scheme of arrangement document shows that the takeover will become one of the largest ever leveraged buyouts in Europe, with a £8.2bn (€12bn) loan used to finance the deal.
Mr Pessina and KKR will each own 32.3% in Boots when it is taken private, with their bank backers such as Royal Bank of Scotland and Barclays owning 35.4% between them.
