Last-minute bid due for Lloyds

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The Independent Online
The City is braced for a last- minute pounds 650m rival bid for Lloyds Chemists from Germany's Gehe before a Takeover Panel deadline runs out this Friday.

This weekend, Gehe was playing its cards close to its chest as its nine- month long battle with Unichem goes down to the wire.

Whoever finally clinches Lloyd's 924-strong chain, however, will take the top slot from Boots in the pharmacy sector.

Gehe has been biding its time following Unichem's pounds 657.6m renewed cash and shares offer a fortnight ago.

After a slip in Unichem's shares since, that bid is now worth only pounds 640m, or 495p per share, against Lloyd's 516p price on Friday.

This weekend, Gehe sources indicated it was likely to make an renewed offer, despite trying to talk down the price following the enforced disposal of Lloyd's wholesaling business after a monopolies inquiry. Gehe originally bid pounds 650m all in cash in February.

Analysts expect a bid of up to 525p to deliver a knock-out blow to Unichem, which is already facing earnings dilution.

Unichem said, however, it is confident of institutional support for the deal, which would more than double its size to 1,385 outlets compared with Boots' 1,226. Gehe would have 1,280.

"We acknowledge the bid is dilutive for us in the first year, but we're confident it will be enhancing thereafter," a Unichem spokesman said. "If they come in at above pounds 5, it would have to be substantial to make us baulk and think twice."