CD&R wins $9.5-billion auction for U.K. supermarket Morrisons

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Clayton, Dubillier & Rice (CD&R) has won an auction for Morrisons with a £7 billion ($9.5 billion) bid, paving the way for the US private equity firm to take control of Britain’s fourth-largest supermarket conglomerate It is done.

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The takeover panel, which controls M&A deals and auctions in the UK, said on Saturday that CD&R had offered 287 pence per share, while SoftBank-owned Fortress Investment Group LLC led A consortium in 2008 offered 286 pence.

CD&R’s win marks a return to the UK grocery sector for Terry Leahy, former chief executive of Britain’s largest supermarket chain Tesco Plc, who is the firm’s senior advisor.


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The winning bid was only slightly higher than CD&R’s 285 pence per share offer, which was recommended by Morrison’s board in August.

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The board, due to meet later on Saturday, is expected to recommend to shareholders the adoption of the new proposal at its shareholder meeting on October 19.

Morrison and CD&R did not immediately comment on the outcome of the auction.

If shareholders approve the proposal, CD&R could complete its acquisition of Morrisons by the end of the month, the second UK supermarket chain to be acquired by private equity after the purchase of No. 3 player Asda, which was completed in February.

Based in Bradford, northern England, Morrison started out as an egg and butter merchant in 1899. It listed its shares in 1967 and is the UK’s fourth largest grocer after Tesco plc, Sainsbury’s and Asda.

The battle for Morrison, which has been going on since May, is the most high-profile of bids for British companies this year, reflecting private equity’s appetite for the UK’s cash-generating assets.

CD&R has committed to retaining Morrison’s Bradford headquarters and its current management team led by CEO David Potts, executing its current strategy, selling its freehold store assets, and maintaining employee pay rates. However, the commitments are not legally binding.

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Leahy was CEO of Tesco plc from 14 years to 2011 and will now be reunited with Potts and chairman Andrew Higginson, CEO of Morrison, two of his closest lieutenants at Tesco plc.

Potts, who joined Tesco plc as a 16-year shelf-stacker, would make more than £10 million from selling his Morrison shares to CD&R. Chief Operating Officer Trevor Strain will pocket approximately £4 million.

The fort is abandoned to lick the wounds and reduce the cost of the saga. Documents published in July showed Fort expected to incur banking and advisory fees and £263.5 million.

In a statement, the group said it wished Morrison all the best for the future of those associated with Morrison, adding: “The UK remains a very attractive investment environment from many perspectives, and we are looking forward to employing strong management teams to help grow and build our businesses.” Will continue to explore opportunities to help have long-term value.”

Sainsbury’s has been touted as another potential target for private equity and investment companies in recent months.


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