Shares in Morrisons rise as suitor gets extra time to make offer
FTSE 250 grocer Morrisons has been at the centre of a takeover tussle since June, when an initial 230p proposal from private equity giant Clayton, Dubilier & Rice was rejected.
A Fortress-led consortium then last month secured a recommendation from the retailer’s board at 254p per share, before upping that offer on Friday to 272p per share in a £6.7 billion deal.
Some shareholders had considered the initial approaches too low. Hargreaves Landsdown equity analyst Laura Hoy last week said: “The renewed offer came off the back of speculation that a better offer from CD&R could be on the horizon as well as vocal hostility form some large shareholders.”
Clayton, Dubilier & Rice, which counts former Tesco boss Sir Terry Leahy among its advisers, initially had until today to table any offer, but asked for more time to consider its options in response to the increased Fortress offer.
Today the Takeover Panel, which regulates UK merger and acquisition activity, has agreed to give the private equity firm an extension until August 20.
Majestic Wine owner Fortress is part of a consortium which also includes the Canada Pension Plan Investment Board and Koch Real Estate Investments.
Shares in Morrisons this morning gained 2p to 280.8p as the prospect of a bidding war stretching out looked possible.