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One of the private equity groups bidding for Alliance Boots has returned with a new offer of £11.1 billion.

Today's renewed bid from Kohlberg Kravis Roberts (KKR) and Stefano Pessina, deputy chairman at the health and beauty group, is almost five per cent higher than the one made on Friday.

Hours after Alliance Boots' board recommended Friday's bid, it received a £10.8 billion takeover offer from a rival private equity consortium made up of Terra Firma, the Wellcome Trust and HBOS.

Today's bid from KKR and Mr Pessina, who is Alliance Boots' largest shareholder, is 1,139p per share, the same price that its takeover vehicle AB Acquisitions bought almost 50 million shares last night.

If approved by shareholders, the deal would represent by far the largest acquisition of a UK group by a private equity fund.

Alliance Boots is best known for its high street chemist outlets in Britain, but it also has a sizeable overseas pharmacy presence and wholesale supply business.

Unions have already expressed concerns over workers' futures in light of the private equity bidding war.

Brendan Barber, TUC general secretary, said: "Many such takeovers have hit staff and customers hard as the new owners seek to make the biggest and quickest possible buck at the expense of the long term.

"Staff and customers - including the NHS - need to know whether they plan to invest in Boots, consult with the workforce and honour the terms and conditions already enjoyed by Boots staff, or whether the costs of servicing a debt financed takeover will mean a worse deal."