20th Jun 2021 09:32
(Alliance News) - Wm Morrison Supermarkets PLC has rejected a GBP5.5 billion takeover bid from a private equity firm, believing it "significantly undervalued" the company.
Clayton, Dubilier & Rice earlier noted press reports of a potential transaction involving Morrisons and confirmed that it was "considering a possible cash offer".
CD&R, which has until July 17 to announce a firm intention to make an offer under UK takeover rules, added in a statement that there can be "no certainty an offer will be made".
Morrisons said it rejected a conditional cash offer from CD&R of 230 pence per share – which amounts to just over GBP5.5 billion.
Morrisons shares closed down 1.8% at 178.45p in London on Friday, meaning the proposal offered a 29% premium.
In a statement, the supermarket chain said: "The board of Morrisons evaluated the conditional proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the conditional proposal significantly undervalued Morrisons and its future prospects.
"Accordingly, the board rejected the conditional proposal on 17 June 2021."
Last month, Morrisons said sales in the 14 weeks to May 9 grew 2.7% on a like-for-like basis, excluding fuel, including a 113% jump in online sales.
But before the easing of lockdown, the supermarket said it had to spend an extra GBP27 million in Covid-19 costs during the past three months to cover for staff absences and store marshals.
source: PA
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