Alliance Boots set to name Hornby as new chief executive

Shock return for discredited former HBOS banker at pharmacy chain

Andy Hornby, the former chief executive of the failed bank HBOS who is accused in some quarters of being one of the key architects of the UK banking crisis, is set to make a shock return to front line business as the chief executive of Alliance Boots.

The pharmacy chain, which is owned by US private equity group Kohlberg Kravis Roberts (KKR) and its executive chairman Stefano Pessina, confirmed yesterday that Mr Hornby is one of the names being considered for the role: "Alliance Boots has been looking to fill the new role of chief executive. The new chief executive will report to Stefano Pessina, who will continue to work full-time in the business, including chairing the group's executive committee. Alliance Boots confirms it is currently engaged in discussions with Andy Hornby, who is a leading candidate for the role. It hopes to complete the process shortly and a further announcement will be made at that time," the group said in a statement.

In fact, it is understood that Mr Hornby will almost certainly get the job, with an announcement expected as early as this week. Mr Hornby's appointment by the heavily indebted group would mark a remarkable comeback. As recently as February he was forced to apologise in front the Treasury Select Committee for his role in last year's banking meltdown and is now widely blamed for many of the difficulties faced by the Lloyds Banking Group.

Lloyds merged with HBOS in a hastily arranged and government brokered takeover in January, which was designed to prevent HBOS going bankrupt. The combined group has spent the last few months trying to establish the scale of HBOS's exposure to toxic mortgage assets and other non-performing investments. The bank has been forced to accept a taxpayer-funded bailout after declaring billions of pounds of losses.

Such a speedy return for Mr Hornby is likely to meet with accusations that he is being rewarded for the failure of HBOS. According to the group's latest annual review, five out of six of Boots' directors earned more than £700,000 in salary and bonuses last year.

The appointment was also met with incredulity by politicians yesterday. Lord Oakeshott, the Liberal Democrats' Treasury spokesman in the House of Lords said: "The private equity asset strippers KKR have taken over Boots and loaded it up to the eyeballs with debt. The company should have learned the lessons of HBOS's collapse under Mr Hornby and pay down its debts so that Boots might become a strong company again."

KKR and Mr Pessina took Alliance Boots private in 2007 in one of the most high profile and ambitious leveraged buyouts in the months leading to the onset of the credit crisis.

KKR borrowed nearly all of the estimated £12.4bn for the takeover and like in other private equity-backed deals passed on the debt to Alliance Boots. The company is now forced to hit performance and debt targets stipulated by the syndicate of banks that financed the deal. The group has met all its targets to date and has been boosted by strong sales and by savings made from aggressive job cuts.

But it emerged yesterday that Alliance Boots has sent "begging letters" to its landlords, asking to move from quarterly to monthly rent payments in an effort to help cashflow. One commercial property specialist said he had received such a letter within the last week. Boots was not available for comment yesterday.

In May, KKR announced a $1.2bn (£730m) loss last year as the financial market slump took its toll. KKR said it swung to a full-year loss from "economic net income" of $815m in 2007.

Mr Hornby made his name as a retailer having worked for Asda, where he was managing director of its clothing brand, George. He continues to serve as a non-executive director of Home Retail, the Argos owner.

Start your day with The Independent, sign up for daily news emails
News
election 2015The 10 best quotes of the campaign
News
A caravan being used as a polling station in Ford near Salisbury, during the 2010 election
election 2015The Independent's guide to get you through polling day
News
people
Voices
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month
voicesWhat I learnt from my years in government, by the former Home Secretary David Blunkett
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'