Morrisons shareholders give seal of approval to $10bn CD&R takeover deal
Shareholders in Morrisons have voted to approve a £7bn ($9.7bn) takeover bid from US private equity firm Clayton, Dubilier & Rice, in the official end to a long and heated takeover battle.
British supermarket Morrisons said the required majority of three quarters of its shareholders backed the deal at a hybrid in-person and virtual investor meeting this afternoon.
CD&R came out on top at auction for Morrisons with a bid of £7bn or 287 pence per share for the supermarket earlier this month – just a penny above the 286 pence offered by a consortium led by SoftBank-owned Fortress Investment.
Including debt, CD&R’s bid for the UK’s fourth-largest supermarket represented an enterprise value of £9.95bn.
Morrisons chair Andrew Higginson said: “We thank shareholders for the strong support received at today’s meetings.
“We remain confident that CD&R will be a responsible, thoughtful and careful owner of Morrisons and we will now move forward with the remaining steps in the acquisition process.”
Sir Terry Leahy, CD&R’s senior adviser and former Tesco boss, has been tipped to be appointed as the new chair of Morrisons.
Reacting to the shareholder approval, he said CD&R was “excited at the opportunity that lies ahead.”
“The particular heritage, culture and operating model of Morrisons are key features of the company and we will be very mindful of these during our tenure as owners,” Leahy said.
He added that the private equity group wanted “not just to preserve the company’s many strengths – but to build on these, with innovation, capital and new technology – helping the business realise its full potential and delivering for all of its stakeholders.”
It marks the end of a long, heated battle for the UK’s fourth largest supermarket that began back in June when US private equity group CD&R first made an unsolicited offer of 230 pence per share.
After Morrisons rejected this offer, a trio of private investment groups led by SoftBank-owned Fortress entered the equation with a rival offer of £6.3bn in July.
But shareholders felt this offer was too low, and Fortress made a comeback with an increased offer of £6.7bn in August, which the grocer’s board accepted.
Fortress’ pole position didn’t last long, however, as CD&R returned with a fresh increased bid of £7bn at the end of August, leading to Morrisons’ board withdrawing their support for Fortress and unanimously accepting the original bidder’s.
In order to resolve the competition, the stock market’s Takeover Panel said earlier this month that it would run a bidding process of up to five rounds because neither CD&R or the Fortress consortium that had been vying for the grocer since June had declared their offers final – in which CD&R came out on top.
New York-based firm CD&R is one of the most firmly established investors in the sector and has been advised by former Tesco chief Sir Terry Leahy over the past 10 years.