The buyers of health and beauty group Alliance Boots have offered the Boots pension fund around £240 million plus a safety package worth £600 million, sources close to the matter said today.
The offer from Kohlberg Kravis Roberts and Alliance Boots deputy chairman Stefano Pessina, whose £11.1 billion-pound offer was voted through on Thursday, would provide the retirement scheme with £600 million in cash in the event that the firm gets into financial difficulty in future, in addition to the upfront injection, one of the sources told Reuters news agency.
Boots' pension fund showed a surplus of £20 million last year but the trustees have estimated the size of the scheme's deficit on a self-sufficiency basis - a measure that assumes no further contributions - to be around £1 billion.
On Thursday John Watson, the head of Alliance Boots pension trustees, strongly criticised the firm for agreeing to Europe's largest-ever private equity buyout before a deal is reached on pension provision.
However, at the same meeting the firm's chairman Nigel Rudd said that Boots' pension fund was "one of the best run and best funded in the FTSE" and that he had "assurances" from KKR and Pessina that would continue.
KKR is taking on £8 billion of debt to fund the buyout of one of Britain's best-known companies, which has already been condemned by unions and some politicians amid fears of asset-stripping by private equity "barbarians".
Boots pension scheme trustees were not immediately available for comment. KKR declined to comment.