Morrisons heads for takeover auction
The battle for the supermarket chain continues as Morrisons’ Board enters talks with the takeover regulator and both rival bidders to begin an auction procedure.
Morrisons’ Board of directors accepted a £6.7 billion offer from a US private equity consortium led by Fortress in July, before backing a £7 billion offer from private equity firm Clayton, Dubilier & Rice (CD&R), also US-based, last month.
In a statement, the Morrisons Board said that as neither Fortress nor CD&R had declared their offers to be final, which means they could be increased or otherwise revised, “a competitive situation continues to exist.” The Board has entered into discussions with the stock market’s Takeover Panel, along with Fortress and CD&R, to resolve the situation by way of an auction procedure.
The Board stated: “In addition to the financial terms of any offer, the Morrisons Board continues to place very significant emphasis on the wider responsibilities of ownership of Morrisons. These responsibilities include a recognition of the importance to the Morrisons business of all stakeholders, including colleagues, customers, pension trustees and suppliers as well as the distinct heritage and history of Morrisons and the legacy of Sir Ken Morrison.”
Shareholder meetings to discuss both offers will be convened in October, but the auction procedure is expected to take place prior to that date. The Board anticipates only going ahead with either the Fortress or CD&R meetings, depending on which offer it recommends to the shareholders.