U.K. Grocer Morrisons Accepts Bid From CD&R

In the most current twist in  a takeover fight around Britain’s fourth-biggest grocery chain, Morrisons has agreed to be marketed to U.S. personal equity business Clayton Dubilier & Rice for about $9.5 billion (six.97 pound sterling).

CD&R’s provide, really worth 285 pence for every share, topped a 272 pence for every share bid from rival personal equity team Fortress Investment Team that Morrisons had advisable to its shareholders previously this thirty day period.

“The Morrisons board believes that the provide from CD&R represents fantastic worth for shareholders although at the very same time preserving the elementary character of Morrisons for all stakeholders,” Morrisons Chair Andrew Higginson reported Thursday.

“CD&R have a sturdy file of creating, strengthening and developing the enterprises that they commit in and they share our eyesight for Morrisons’ potential,” he additional.

But Morrisons’ shares closed on Thursday at 279.2 pence, indicating traders expected a greater provide. Fortress reported it was “considering its options” and urged Morrisons shareholders to take no action.

Morrisons, which began out as an egg and butter merchant in 1899, is the U.K.’s No. 4 grocer immediately after Tesco, Sainsbury’s, and Asda. Its assets include things like 339 filling stations, which would supplement the 918 that CD&R now owns through its Motor Fuel Team.

The bidding war around Morrisons started in June when CD&R made available 230 pence for every share, or 5.5 billion lbs. Fortress countered with a bid for 254 pence for every share, or six.three billion lbs in July, and sweetened its provide to six.7 billion lbs two months ago.

Sir Terry Leahy, the previous Tesco main govt, is one particular of CD&R’s senior advisers and labored together with Higginson and David Potts, the Morrisons main govt, in the course of his extensive reign at Tesco.

“CD&R is delighted to have the possibility to assistance the administration of Morrisons in executing their technique to mature and produce the business enterprise,” he reported Thursday. “The grocery sector in the U.K. is undergoing terrific improve and we believe that Morrisons is perfectly placed, with CD&R’s assistance, to succeed in this surroundings.”

CD&R’s agreed bid represents a 60% premium to Morrisons’ share price tag prior to takeover desire emerged in mid-June.

Photograph by Christopher Furlong/Getty Pictures
Clayton Dubilier & Rice, Fortress Investment Team, grocery, Morrisons, takeover bid