UK supermarket chain Morrisons has agreed to a takeover offer worth £7 billion from US private equity firm Clayton, Dubilier & Rice (CD&R).
The agreement sees Morrisons drop its recommendation of a lower bid from a US investment consortium led by Fortress Investment Group.
A takeover offer worth £6.3 billion by a Fortress-led group was initially recommended by Morrisons, then subsequently raised to £6.7 billion after major shareholders indicated that they wanted more.
The newly announced takeover bid from CD&R – which still needs to be put to a shareholder vote – gives Morrisons an enterprise value of £9.7 billion, once debt is included.
The deal will see shareholders receive 285p per share and comes after Morrisons previously rejected a £5.52 billion bid from CD&R, saying that it had “significantly undervalued” the business.
Commenting on the new offer, Morrisons chair Andrew Higginson said: “The Morrisons board believes that the offer from CD&R represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders”.
Terry Leahy, senior adviser to CD&R funds, said: “CD&R is delighted to have the opportunity to support the management of Morrisons in executing their strategy to grow and develop the business”.
Leahy added that “CD&R values Morrisons’ distinctive business model and is committed to supporting it”.
Under British takeover rules, Fortress could still come back with a higher offer, according to Reuters.
© FoodBev Media Ltd 2021
World Beverage Innovation Awards – NOW OPEN FOR ENTRIES!
The awards celebrate excellence and innovation across the global beverage industry.
Don’t miss out on having your innovations recognised on a global scale.
Deadline for entries 23 July – enter now!
Don’t get left behind
Start your free Foodbev magazine trial today and join thousands of fellow industry professionals in receiving food and drink trends direct to our business.
Click here to start your free trial