6th Aug 2021 11:39
(Alliance News) - Wm Morrison Supermarkets PLC on Friday said it has agreed to an increased takeover offer from a consortium led by Softbank Group Corp-owned Fortress Investment Group LLC.
Under the latest offer, shareholders will receive 272 pence for each Morrisons share they own, valuing the supermarket chain at GBP6.7 billion. The offer comprises of a 270p cash payment from the consortium and a 2p special dividend.
The latest tilt is a 7% premium to the previous Fortress offer of 254p, which included 252p in cash per share, plus the 2p dividend. This valued Morrisons at GBP6.3 billion.
Fortress is owned by Softbank Group and the bidding consortium also includes the Canada Pension Plan Investment Board and Koch Real Estate Investments.
The sweetened bid comes after The Times late last month reported that private equity firm Clayton Dubilier & Rice was considering a new takeover offer for Bradford, West Yorkshire-based Morrisons.
The Fortress consortium on Friday noted "speculation regarding a possible counter-offer by CD&R".
In June, Morrisons rejected a GBP5.5 billion offer made from New York-based CD&R, which had sent the supermarket chain's share price soaring but which Morrisons ultimately said it was too low.
Morrisons shares were 2.2% higher at 278.04p each in London on Friday morning, valuing the company at GBP6.72 billion. In the last session prior to the CD&R offer, shares in the grocer closed at 178.45p. The stock is up 57% so far in 2021.
In addition, asset manager Apollo Global Management decided against making an offer for Morrisons. In July, Apollo said it was in the "preliminary stages of discussions" with Fortress, with a view of joining the consortium.
Later in July, GIC, one of the managers of Singapore's sovereign wealth funds, joined the bidding consortium led by Fortress.
This cooled the potential for a bidding war and ensured the Fortress-fronted consortium was the leader in the race to acquire Morrisons.
On the latest Fortress offer, Morrisons said: "The Morrisons directors consider the Increased Fortress offer to be in the best interests of the Morrisons shareholders taken as a whole. The Morrisons directors have also taken into account the interests of the Morrisons business, its management and employees, the Morrisons pension schemes and other stakeholders in Morrisons."
Under City takeover rules, CD&R has until August 9 to announce whether or not it plans to make an offer for Morrisons.
By Eric Cunha; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
MRW.L