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The board of Alliance Boots has recommended a £10.6 billion private equity takeover to shareholders.

Today's 1,090p per share offer from Kohlberg Kravis Roberts (KKR) and Stefano Pessina is more than 33 per cent higher than Alliance Boots' closing share price on March 8th, the day before it received its first bid approach.

Alliance Boots, created in a union between Boots and Alliance-Unichem last year, has more than 3,100 retail outlets and 380 distributing depots across Europe, and is the leading pharmacy-led health and beauty group in the UK.

As the bid from KKR and Mr Pessina, the executive deputy chairman of Alliance Boots, receives board approval, a rival private equity group made up of Terra Firma, the Wellcome Trust and now HBOS has said it will bide its time, urging Alliance Boots shareholders to "take no action".

Commenting on today's recommended offer, Alliance Boots chairman Sir Nigel Rudd said: "I have been privileged to chair one of this country's greatest retail brands and to have put in place the management team that has put this company back on the road to success.

"The formation last year of Alliance Boots created a hugely valuable business and this offer reflects that. I am delighted that the board has been able to achieve such a good price for shareholders."

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

"Our objective is to work with Stefano Pessina and the existing management team to enhance Alliance Boots' position as a global leader in the healthcare services and beauty industries," said KKR partner Dominic Murphy.