Morrisons backs £7bn revised bid from US firm
Morrisons is in a bidding war
Supermarket chain Morrisons has backed a new bid for the company by US private equity firm Clayton Dubilier & Rice, worth what is seen as a knockout £7 billion.
The new bid at 285p a share trumps a 272p offer, worth £6.7bn, from the consortium led by Softbank-owned Fortress, and an earlier bid from CD&R in June valuing the company at £5.5bn.
The board of Morrisons backed the offer from Fortress but has now switched its recommendation to the new CD&R bid which represents a 60% premium to Morrisons’ share price before takeover interest emerged in mid-June. It has an enterprise value of £9.7bn once debt is included.
Fortress said it was considering its options and urged Morrisons’ shareholders to “take no action” on CD&R’s agreed bid, which will require their approval at a meeting in October. Its statement suggests the bid battle for Britain’s fourth-biggest grocer may not be over. It has almost 500 shops and more than 110,000 staff.
Morrisons chairman Andrew Higginson said the latest offer “represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders”.
The takeover talk has prompted concerns from MPs about the potential for new owners selling off property assets or reducing the rights of workers.