Shares in Morrisons fell on Monday after the battle for control of the UK supermarket ended at the weekend with US private equity firm Clayton, Dubilier and Rice (CD&R) emerging as the winner.
The auction for Morrisons went to three rounds, finishing with the offer being upped by 2p to 287p a share. CD&R’s winning bid for Morrisons values the company at £9.97bn, including debt.
At the open of trade on the London Stock Exchange on Monday, shares in Morrisons were down 3.7% at 286p.
The winning bid
The auction, which took place on Saturday, was supervised by the Takeover Panel, the UK’s merger and acquisitions regulator.
CD&R’s final bid of 287p a share was 2p a share above its existing offer and a penny above the 286p offered by a consortium led by SoftBank-owned Fortress Investment.
The Fortress bid valued Morrisons at £9.95bn. Joshua Pack, managing partner at Fortress, told the FT that Morrisons was “an outstanding business” and wished it and its new owners “the very best for the future”.
CD&R is paying a 61% premium to the price of Morrisons shares before the bidding war started four months ago.
“Good value for shareholders”
Commenting on the CD&R Final Offer, Andrew Higginson, chair of Morrisons, said: “Today’s final offer from CD&R represents excellent value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders.
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CD&R have good retail experience, a strong record of developing and growing the businesses in which they invest, and they share our vision and ambition for Morrisons. We remain confident that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business.”
He added: “Shareholders will now have the final say and, if the offer is approved, the Board is confident that Morrisons will continue to go from strength to strength under CD&R’s ownership.”
Sir Terry Leahy, the former Tesco boss and now a senior adviser to CD&R, said: “We are gratified by the recommendation of the Morrisons Board and look forward to the shareholder vote to approve the transaction. We continue to believe that Morrisons is an excellent business, with a strong management team, a clear strategy, and good prospects.”