Morrison’s accepts £6.3billion takeover bid from US investment group just two weeks after supermarket turned down offer from private equity firm
- Morrisons shareholders will receive 254 pence a share under terms of the deal
- The offer exceeds the £5.52billion proposal from a private equity firm on June 19
- The offer represents a premium of 42 per cent to Morrisons’ closing share price
Morrisons has agreed a takeover offer from a new US investment groups which values the British supermarket group at £6.3billion.
Shareholders will receive 254 pence a share, comprising 252 pence in cash and a 2 pence cash dividend as a result of the deal by the trio of private investment groups led by Fortress.
The offer exceeds the £5.52billion proposal from US private equity firm Clayton, Dubilier & Rice, which Morrisons rejected on June 19, saying it was far too low.
The deal was struck by Softbank-owned Fortress, Canadian pension fund CPPIB and a unit of Koch Industries.
Morrisons has agreed a takeover offer from a new company owned by funds managed or advised by affiliates of Fortress Investment Group
Morrisons, which trails UK market leader Tesco, Sainsbury’s and Asda in annual sales, said the offer represents a premium of 42 per cent to its closing share price of 178 pence on June 18 – the last business day before CD&R’s proposal.
Shares in Morrisons closed on Friday at 243 pence, valuing the business at £5.8billion.
Fortress is a global investment manager with about £38billion in assets under management as of March.
Morrisons said an initial unsolicited proposal was received from Fortress on May 4 at 220 pence a share. This offer was not made public.
Shareholders will receive 254 pence a share, comprising 252 pence in cash and a 2 pence cash dividend as a result of the deal
Fortress then made four subsequent proposals before its offer reached a total value of 254 a share on June 5.
Andrew Higginson, Morrisons chair, told the Financial Times: ‘We have looked very carefully at Fortress’ approach, their plans for the business and their overall suitability as an owner of a unique British food-maker and shopkeeper with over 110,000 colleagues and an important role in British food production and farming.
‘It’s clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons.’