Knockout blow? Bidder for UK’s Morrisons raises offer – KIRO 7 News Seattle

LONDON – (AP) – A consortium led by the US private equity firm Fortress has increased its offer to buy Morrisons, Great Britain’s fourth largest supermarket chain.

In a statement Friday, Fortress said it would increase its offer for Morrisons by £ 400 million to £ 6.7 billion ($ 9.3 billion). His previous offer had already been approved by the Morrisons board of directors.

The consortium, which includes the Canada Pension Plan Investment Board and Koch Real Estate Investments, said the offer represented a 52% premium on Morrisons’ price of 178p per share at the closing price prior to the initial takeover offer.

However, it said it had to go higher due to “speculation about a possible counteroffer” by Clayton, Dubilier & Rice, another group of investors.

Under UK takeover rules, CD&R must submit a firm offer or go off the table by August 9th. His previous £ 5.5 billion offer was rejected in July.

The Morrisons board of directors called on shareholders at a special meeting on August 16 to support the new offer.

Morrisons employs approximately 110,000 people, operates 497 stores and 339 gas stations across the UK

Private equity firms typically acquire undervalued companies and then look for ways to cut costs and increase profits before selling them for a profit. UK assets are widely considered to be cheaper than they would otherwise have been due to the UK’s exit from the European Union and the coronavirus pandemic.

Morrisons appears to be an attractive opportunity for private equity as its value was below pre-pandemic levels despite strong recent earnings.

Morrisons was founded in 1899 as an egg and butter shop in a market in the northern English city of Bradford. It expanded steadily and became a public company in 1967. In 2004, it expanded further with the acquisition of competitor Safeway, expanding its presence in the south of England.

The company is now largely owned by a number of institutional shareholders, including Silchester International, Columbia, Blackrock and Schroders. Many shareholders, including Silchester, had announced that they would vote against Fortress’s initial offer.

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