Morrisons’ bidding war rumbles on as private equity firm given “put-up or shut-up” extended deadline

09 Aug 2021 --- The ongoing bidding war for UK supermarket Morrisons has taken another turn as US-based private equity group Clayton, Dubilier & Rice, has been given more time to consider a rival offer.

The UK’s regulatory body overseeing acquisitions, the Takeover Panel, has allowed CD&R until August 20 at 5 p.m. to confirm its offer for Morrisons or give up the deal, known as a “put-up or shut-up” deadline, which extends the previous August 9 deadline.

In efforts to sway reluctant shareholders, Fortress Investment Group recently escalated its offer for the Morrisons by £400 million (US$554.5 million), to £6.7 billion (US$9.3 billion).

“Morrisons directors believe that the increased Fortress offer is in the best interests of Morrisons shareholders as a whole, and accordingly unanimously recommend that Morrisons shareholders vote in favor of the resolutions required to implement the increased Fortress offer,” states the retailer.

The supermarket group previously turned down an offer of £5.5 billion (US$7.6 billion) from CD&R made in June, saying “it had significantly undervalued the business.”

Speculation of a bidding war first started brewing when Apollo Group entered recently as the third firm to show interest in Morrisons.Contenders for ownership
Speculation of a bidding war first started brewing when Apollo Globe entered recently as the third firm to show interest in Morrisons.

The newly increased bid by Fortress, which is owned by Japanese investment bank SoftBank, represents an offer of 270p a share, with a further special dividend of 2 pence a share.

Fortress states that it is “committed to becoming the new owner of Morrisons.”

Last Friday, Morrisons postponed a shareholder meeting to vote on the offer from Fortress to August 27, which is 11 days later than previously scheduled.

Shareholders’ optimism
Morrisons’ shares closed just below 279 pence on Friday, marking their highest level since 2013, which signals that shareholders were hoping to see a higher offer for the chain, according to analysts.

Today, shares edged 0.5 percent higher as the stock was trading at 280p (US$3.89) in early deals.

The supermarket chain has almost 500 establishments in the UK and employs over 110,000 staff.

By Benjamin Ferrer