The battle for Boots looks set to become corporate Britain’s version of Barbarians at the Gate, the legendary fight for the ownership of RJR Nabisco in 1989.

Both KKR and Boots thought the story was over yesterday morning when they announced their agreed £10.90 offer. In fact, it had only just begun. Within a couple of hours Guy Hands emerged with an offer of £11.26 and ruined the celebration.

Regardless of whether Mr Hands can make his deal stick, he is leaving alot of people dumbfounded.

The analyst community, which had been talking down the company at £8 a share, has been looking as independent- minded and intelligent as a herd of sheep ever since KKR and Stefano Pessina teamed up for a £10 a share offer.

Sir Nigel Rudd, the Boots chairman, deemed their formal offer of £10.40 a “cracking price” and recommended it to shareholders. But it turns out that KKR and Mr Pessina had no trouble coming up with more money when Mr Hands registered an offer of £10.85 on Tuesday.

Sir Nigel may well claim that he is not a fool but a wizard: he has managed to conjure up an auction. But the fact is that what the Boots board described as a full and fair price for the business just a few days ago, now looks like a sale on the cheap. (And, let’s be perfectly clear. The analysts and Sir Nigel are not the only ones scratching their heads. I thought that £10 was a handsome offer.)

So what is the real value of Boots? The only safe conclusion at this stage is that the price being offered for Boots is not a “fair price” for the company. It is either too high or too low. In a couple of years’ time we will find out which.

There is reason to be suspicious that the price is too low and that the future private owners of Boots will make off with a fortune. Mr Pessina knows the business better than anyone and has long-term ambitions to create a global pharmaceutical wholesaler.

But the chances are that the price is on the high side. The forces propelling the price ever higher are not altogether logical. Both KKR and Guy Hands have reasons for wanting to win the battle that involve the bragging rights to the first buyout of a FTSE 100 company. The challenges facing the business remain considerable: Boots faces serious competition from lower cost, higher volume supermarkets; the opportunities for global consolidation of the wholesale business is limited; the debt service costs will inhibit acquisitions. Given these pressures, it is possible that shareholders will bless the day they sold the pharmacy business and look back at the private equity buyers and say: “Were those guys on drugs?”

A new ethic: pay as you learn

If you ever find yourself doing a role-play exercise, the chances are that you are on a “training course”. You will probably have just come from a mid-morning break of shortbread biscuits and lukewarm coffee, preceded by a session which involved sitting around in a semi-circle while a professional trainer puts such a premium on group participation that 15 minutes worth of information is dispensed over an hour and a half.

The training day is widely treated as an in-joke. Depending on your point of view, it is either a day out of the office or an unbearable chore of corporate life.

But on-the-job training is one of the most critical factors in UK competitiveness. As Lord Leitch pointed out in his review on skills in the UK, 70 per cent of the 2020 workforce have already completed their compulsory education. If the UK is going to improve its competitiveness and productivity, it has to teach people already in work.

The Government continues to look to the business world to address this problem, but the burden is placed too heavily on employers and not nearly enough on employees.

Workers should pay for on-the-job training. They need not pay for all of it, but their contribution needs to be financially meaningful. The market for adult education is not working because the rules of supply and demand, investment and reward have been suspended.

The proportion of adults trained in the UK is high — 61 per cent — but just 19 per cent are contributing any of their own funds towards education and training, compared with a 37 per cent average in the industrialised world. And, as often as not, workers who take up job training are not sufficiently rewarded for doing so: it is an obligation, not an opportunity. Without buy-in from the students, the consumers of these courses have little interest in improving their quality. Why should they care if the trainer is long-winded, the course is out-dated and the lessons quickly forgotten? After all, it’s just a free day off.

Power politics

Vladimir Putin’s heavy hand is apparent in the last-minute withdrawal of a galaxy of delegates to London’s annual Russian Economic Forum next week. Businessmen reliant on state patronage seem to have been as assiduous as government officials in obeying the Kremlin’s diktat.

There are plenty of reasons to be worried about Russia as a trading partner and a place to invest but we should not be unduly affronted by this particular boycott. It has little to do with investment or trade, the raison d’être of the previously successful forum.

Boris Berezovsky, the most prominent ex-oligarch and Putin opponent exiled in London, suggested publicly a few days ago that his homeland needed a coup d’état. The Kremlin has been trying to get at him for years. It is now apparent why.

Boycotting a London conference supported by émigrés can be seen as a low-key gesture of protest. It should be accepted as such in Britain. The UK should not over-react, but treat this as a Berezovsky issue, not a British one. The Russian Economic Forum has been and remains a good friend of the Russian economy. It will manage for a year without Putin’s lackeys.

–– Over Easter, a private equity consortium tried to buy Sainsbury’s. The key players were not exactly on holiday, but they were abroad. They were on the phone and on their BlackBerrys. This did not cost them the bid, but it did not help — nor can it have made them particularly popular with their families. George Wimpey’s bankers have asked for an extra week to work on the Taylor Woodrow merger to account for a “proper Easter”. Good for them.

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