The management of the Nottingham-based drugs and medical consumables wholesaler, Alliance Boots, has rejected a proposed £9.7-billion offer from US-based private equity group, saying the offer price was too low.

The management of Alliance Boots, which met to consider the offer, has concluded that the offer price of £10 per share did not reflect the value of the firm that has over 3,000 retail outlets with 2,600 in the UK alone and also a major drugs wholesale operation, with a 40-per cent market share.

The board said that the offer did not reflect the fundamental value of the company or the attractive prospects, opportunities and synergies available.

Described as a "friendly approach", the KKR offer has the backing of Italian billionaire Stephano Pessina, who owns a 15-per cent stake in Boots.

Commentators predict the Alliance Boots board would be keen on potential buyers putting in counter offers, leading to a bidding war for the company.