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 2022
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