CD&R Wins USD 10 Billion Auction for UK Supermarket Morrisons
The board of Morrisons recommended CD&R’s 287 pence per share bid on Saturday, just hours after it beat the bid of a consortium led by Softbank owned Fortress Investment Group
On 2nd October, it was reported that Clayton, Dubilier & Rice (CD&R) won the auction for Morrisons with a 7 billion pound (USD 9.5 billion) bid. CD&R, the U.S. private equity firm will soon be taking control of Britain's fourth-biggest supermarket group, Morrisons after winning the auction.
The board of Morrisons recommended CD&R’s 287 pence per share bid on Saturday, just hours after it beat the bid of a consortium led by Softbank owned Fortress Investment Group, which made a bid of just a penny less per share at 286 pence.
In a statement Fortress said: "The UK remains a very attractive investment environment from many perspectives, and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value."
If the shareholders approve the offer, CD&R can complete the takeover of Morrisons by the end of the month, making Morrisons the second UK supermarket chain in a year to be acquired by private equity firm. Earlier this year in February, Asda, the third-largest supermarket chain in the UK, was bought by Issa Brothers in a deal worth £6.8 billion (USD 9.2 billion).
CD&R has committed to retaining Morrisons' headquarters in Bradford, northern England, and its existing management team, led by CEO David Potts. CD&R has also said that it will be following Morrisons’ existing strategy not sell its freehold store estate and maintain staff pay rates. However, these commitments are not binding.
Morrisons Chairman Andrew Higginson said in a statement, “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.”
Morrisons started as an egg and butter merchant in 1899 and went public in 1967. The company is Britain's fourth-largest grocer after Tesco, Sainsbury's, and Asda, who was bought earlier this year by Issa Brothers.
In recent months, Sainsbury’s, the second largest supermarket chain in the UK, is also being dubbed as a possible target for private equity and investment companies and in August 2021, its shares jumped 21% on reports of possible bid of £7 billion ($9.6 billion).
