Morrisons agrees to €7.9bn takeover offer from Fortress
10 August 2021 | 0
Morrisons has agreed to a £6.7 billion (€7.9 billion) takeover offer from a consortium led by Fortress Investment Group.
The British supermarket group agreed to the improved offer despite its shares trading above the level of the new bid. This indicates that investors may be hoping for a counter bid from US private equity group Clayton, Dubilier & Rice (CD&R). Morrisons said its board re-confirmed its unanimous recommendation of the offer.
Fortress said the raised offer comprises a 270 pence per Morrisons share plus 2 pence a share special dividend and was aimed at warding off its rival suitor, CD&R. It said it “remains committed to becoming the new owner of Morrisons and to being a responsible long-term steward of this great British company through the next stage of its evolution.”
Previously, Morrisons’s board had agreed on Fortress offer worth 254 pence a share or a total of £6.3 billion on 3 July. Major Morrisons investors Silchester, M&G and JO Hambro all indicated that offer was too low.
On 17 June, CD&R made a 230 pence a share proposal worth £5.52 billion which was rejected by Morrisons. A 9 August deadline had been set for CD&R to respond by Britain’s Takeover Panel, which regulates corporate takeovers. That deadline could be extended if all parties agreed.
Fortress’s increased offer represents a premium of 52% to Morrisons’ closing share price of 178 pence on 18 June.
Morrisons’ shareholders are due to vote on the Fortress offer on 16 August. In order to pass, the offer must gain the support of shareholders representing at least 75% in value of voting investors at the meeting.
According to analysts, there is potential for Amazon, which has a partnership deal with Morrisons, to make an offer.