US private equity firm wins auction for Morrisons

London

A US private equity firm has won an auction for British supermarket group Morrisons, the Takeover Panel which oversees merger and acquisition deals said last Saturday.

The panel said Clayton, Dubilier & Rice (CD&R) bid 287 pence per share, beating private equity giant Fortress, which bid 286 pence, the panel announced in a short statement.

The winning bid values the company at about £7.1 billion (S$13.1 billion), Morrisons said. Shareholders will have the final say on whether to accept the offer on Oct 19.

Morrisons, based in Bradford, northern England, began business as an egg and butter merchant in 1899, expanding to become Britain's fourth-biggest supermarket by market share, after Tesco, Sainsbury's and Asda. The company has been at the centre of a bidding war for several months. The auction was held because neither CD&R or Softbank-owned Fortress lodged a final offer on their earlier bids.

Morrisons chairman Andrew Higginson said the company's board had approved CD&R's final offer and said it represented "excellent value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders".

"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," he added in a statement. "We remain confident that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business."

In September, Morrisons posted a £54 million first-half loss after tax, blaming the knock-on effects of a global supply chain crisis and a lorry driver shortage. That contrasted with a net profit of £70 million last year, when the sector had been boosted by panic buying in the early stages of the pandemic. AFP