Morrisons: US private equity firm wins £ 7 billion auction for UK supermarket | Economic news
A US private equity firm has won the auction for UK supermarket group Morrisons with a bid of £ 7 billion.
Clayton, Dubilier & Rice (CD&R) offered 287 pence per share.
Morrisons is Britain’s fourth-largest supermarket in terms of market share, after market leader Tesco, Sainsbury’s and Asda.
Based in Bradford, the company began as an egg and butter merchant in 1899.
The battle for Morrisons is the most publicized offering in a series of UK firm offers this year, reflecting private equity’s appetite for cash-generating assets.
The Takeover Panel, which governs the M&A process in Britain, decided to hold an auction because none of the bidders had declared their bids final.
The panel said the US firm had outbid a consortium led by Fortress Investment Group, owned by Softbank, which had offered 286 pence.
Morrisons’ board of directors, which is due to meet later, is now expected to recommend that shareholders accept the new offer at their October 19 meeting.
If shareholders approve the offer, CD&R could complete its buyout of Morrisons by the end of the month.
The CD&R bid team is led by former Tesco Managing Director Sir Terry Leahy.
Last month, Morrisons reported a 43% drop in half-yearly profits after COVID-19 costs took their toll and warned of price hikes and product shortages amid current tensions on supply chains.