US private equity firm Clayton, Dubilier & Rice (CD&R) has emerged victorious in the battle to take over UK supermarket chain Morrisons, clinching a £7 bn (€11.6 bn) deal during an auction held at the weekend.
The deal follows a four-month long takeover fight for the UK’s fourth-largest supermarket group, which saw several mainly US private equity parties engage in a fierce bidding war.
The takeover saga narrowed to a duel over the summer between two US firms, CD&R and Fortress, which is owned by Japanese investment bank SoftBank. A third buyout firm, Apollo Global Management, was initially also in the frame but later withdrew.
CD&R's winning bid of 287p a share was only 2p above its 285 pence a share offer made in August. It was just a penny above the 286p offered by the Fortress-led consortium.
Morrison’s board has recommended that shareholders vote in favour of the CD&R bid of 287 pence per share at a meeting scheduled for 19 October, saying the private equity group had confirmed its previously stated intentions towards Morrisons remained unchanged.
‘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 chairman Andrew Higginson said in a statement.
At least three-quarters of those voting must approve the transaction in order for it to take place.
If shareholders approve the offer, CD&R could complete its takeover by the end of the month, making Morrisons the second UK supermarket chain in a year to be acquired by private equity after a buyout of number three player Asda, completed in February.
Morrisons owns a large proportion of its portfolio of nearly 500 stores, which also includes food production facilities, warehouses and petrol stations.
