This weekend no final decision had been taken, and Jeff Harris, UniChem's chief executive, was still sounding out advisers. Barclays de Zoete Wedd, the company's merchant bank, is under- stood to be concerned that a higher bid might be counter-productive as well as unjustifiable.
UniChem shares leapt 10p to 256p on Friday, valuing its cash and shares bid at pounds 654m - pounds 21m higher on the day, but still pounds 30m short of Gehe's offer.
The shares rose, however, on the expectation that UniChem would lose. It has until Friday to make a counter offer, but shareholders already face earnings dilution in the first year on the existing bid. The deal would treble the size of Unichem's retail chain, but fears of overstretching itself might hit the share price and cancel out higher terms.
"The market is telling us it wants UniChem to lose. It may be better to be hard-headed, forget the last year and gain the credit for just walking away," one market source said this weekend.
UniChem's current bid values Lloyds at 502p per share, against Gehe's 525p - up from 500p - in what analysts now expect to be the knockout blow.
Success would catapult Gehe ahead of Boots, adding Lloyds' 924 stores to its own 357-strong chain of Hills pharmacies. Boots, meanwhile, has 1,226 outlets and Moss just over 460.
Lloyds chairman Allen Lloyd will become pounds 32m richer by cashing in his stake.
Dr Dieter Kammerer, Gehe's chairman, said he was confident of victory after a market raid also snapped up 21 per cent of Lloyds on Friday. "UniChem can only come back by diluting itself further by adding more shares. This does not make the offer more valuable," he said.
Hostilities started last January, but were suspended during a monopolies inquiry before recommencing in November.
Lloyds' shares closed 14p up at 526.5p on Friday in the froth of the battle.Reuse content