LONDON (Reuters) – British supermarket group Morrisons on Thursday agreed a takeover offer worth 7.0 billion pounds ($9.54 billion) from U.S. private equity group Clayton, Dubilier & Rice (CD&R), dropping its recommendation of a lower bid from the Fortress-led consortium.
Morrisons said CD&R’s offer is worth 285 pence a share, trumping a 272 pence a share offer, worth 6.7 billion pounds, from a consortium led by Softbank owned Fortress Investment Group.
The battle for Britain’s fourth-largest grocer after Tesco, Sainsbury’s and Asda, is the most high-profile looming takeover amid a raft of bids and counter bids, reflecting private equity’s appetite for UK Plc.
CD&R’s agreed bid represents a 60% premium to Morrisons’ share price before takeover interest emerged in mid June.
Morrisons’ share price closed Thursday at 279.2 pence, indicating investors expected a higher bid.
CD&R, which has former Tesco boss Terry Leahy as a senior adviser, had a 230 pence a share proposal worth 5.52 billion pounds rejected by Morrisons on June 17.
Morrisons subsequently recommended a bid from Fortress worth 6.3 billion pounds, which was then raised to 6.7 billion pounds after major shareholders, including Silchester, M&G and Hambro, indicated they wanted more.
CD&R’s track record of UK investments includes foodservice group Brakes Brothers and discount retailer B&M. Current investments include petrol forecourt retailer Motor Fuel Group (MFG) and industrial groups Wolseley and SIG.
($1 = 0.7335 pounds)
(Reporting by James Davey, editing by Elizabeth Piper)
