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Takeover doubts

Morrisons’ biggest investor ‘not inclined to back bid’

Morrisons

The supermarket chain’s shareholders are due to vote on a takeover offer

Morrisons’ future was thrown in doubt yesterday after its biggest shareholder said it will not support the £6.3 billion private equity-backed takeover deal for the supermarket chain.

Silchester International, which owns a 15.14% stake in the UK’s fourth largest grocer, said it is “not inclined to support” the recommended deal with a consortium led by US private equity firm Fortress.

It described the bid as “disadvantageous to public shareholders generally”, adding that “there is little in the recommended offer that could not be achieved” by Morrisons under its current ownership as a publicly-listed business.

Silchester said the proposed “scheme of arrangement” – the framework through which the takeover would take place – gave “insufficient opportunity for competing bids to emerge”.

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It wants Morrisons’ board “to allow more time to respond to other parties who might offer better value to Morrison’s public shareholders”.

The Fortress offer is priced at 252p per share but the shares have been trading higher, suggesting a higher offer could be tabled. They closed last night at 266.85p.

Morrisons shareholders are due to vote on the deal, which includes a conditional special dividend of 2p per share, at a general meeting on 16 August.

Fortress, owned by Japan’s Softbank, heads the consortium which also includes Canada Pension Plan Investment Board and Koch Real Estate Investments.

US private equity giant Apollo said it was considering a bid but last week said that it would not make a solo offer, preferring to join the Fortress consortium.

The offer came days after Morrisons’ board rejected a £5.5bn approach from another private equity firm Clayton, Dubilier & Rice (CD&R).



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