Mumbai: British drugs dealer Alliance Boots has received an improved £10 billion-pound ($19.7-billion) takeover offer from billionaire Stefano Pessina and private equity firm Kohlberg Kravis Roberts.

Pessina, the company''s deputy chairman, and KKR bid 1,040 pence a share after Nottingham, England-based Alliance Boots rejected an earlier bid of 1,000 pence (See: Boots rejects KKR''s £9.7-billion offer as being low). The price is 28 per above the March 8 market close of Boot''s share, the day before an approach was disclosed.

Alliance granted KKR a limited period to undertake confirmatory due diligence.

"The board has agreed to grant Kohlberg Kravis Roberts & Co. Ltd. and Stefano Pessina a limited period to undertake confirmatory due diligence," Alliance Boots said in a statement, adding, "A further announcement will be made as and when appropriate."

Alliance Boots was formed last year in a merger that combined 2,400 UK stores and a wholesale drug supplier to more than 125,000 pharmacies and hospitals.

Pessina masterminded last year''s merger and is Alliance Boots'' biggest shareholder with a 15 per cent stake.

Boots Group said it would cut 2,250 jobs over three years as part of its plan to merge with Alliance Unichem. The merged company also wants to cut the cost of buying products for sale in its pharmacies by combining the two companies'' purchasing requirements, and to combine transport networks.

The bid, if successful, would be Europe''s biggest leveraged buyout and follows KKR''s interest in grocery chain J Sainsbury Plc and its $45 billion takeover of TXU Corp.

Reports said private equity group Terra Firma was also considering a bid for Alliance Boots.