American private equity firm Clayton, Dubilier & Rice (CD&R) is reportedly preparing to submit a counterbid for British supermarket chain Morrisons, after a £6.3bn bid from a rival.
US buyout giant Fortress had a £6.3bn bid for Morrisons provisionally accepted last month, after weeks of takeover rumours.
The Sunday Times reports today that CD&R are sorting out equity and debt financing to place a bid next week for Morrisons.
The private equity firm has plans to roll out a chain of Morrisons convenience stores through its 900 petrol stations run by the Motor Fuel Group.
CD&R is also said to be looking at alternative ways to use Morrisons’ excess space in its near 500 supermarkets across the UK.
It comes after Morrisons’ largest shareholder Silchester said this week that it was not interested in Fortress’ £6.3bn bid.
Silchester criticised the board of Morrisons for not waiting for higher competing offers to emerge.
JO Hambro and M&G – also major shareholders – said the 252p-a-share offer from Fortress had undervalued the supermarket chain.
All this is set to launch a bidding war for Morrisons, with City sources telling the Times that there was likely to be incremental bids from a number of rivals with the price potentially going as high as 290p-a-share.