The battle for control of one of the UK’s biggest supermarkets, Morrisons, has stepped up a notch today, with Fortress increasing its bid to £6.7bn.
Fortress increased its offer to £6.7bn, or 272p per share when a 2p per share dividend is included, from £6.3bn earlier. The private equity consortium said said it “notes the speculation regarding a possible counter-offer by CD&R.”
Morrisons shares jumped on the offer news, up 2.7 per cent to 279p per share.
Private equity group Fortress said it “remains committed to becoming the new owner of Morrisons and to being a responsible long-term steward of this great British company through the next stage of its evolution.”
The Canada Pension Plan Investment Board, Koch Real Estate and Cambourne Life Investment also are participating in the Fortress-led bid.
The rival US private equity firm CD&R saw its £5.5bn approach rejected last month.
UK takeover regulators had given CD&R a deadline of Monday to either place its own firm bid for the chain or walk away.
Signed, sealed, but not yet delivered
It also comes after a string of Morrisons’ investors – including largest shareholder Silchester – said they would not back the original 254p per share offer agreed.
Laura Hoy, equity analyst at Hargreaves Lansdown said the defensive move by Fortress could see off an increased bid from is rival to take control of the FTSE100 firm
“The renewed offer came off the back of speculation that a better offer from CD&R could be on the horizon as well as vocal hostility form some large shareholders. The board at Morrisons has agreed to the offer, which promises to keep Morrisons’ existing strategy in place and refrain from closing stores—a rarity in the world of private equity takeovers, and may assuage concerns among staff and the wider communities where the company operates”.
“The deal is signed, sealed, but not yet delivered. CD&R can still come back with a better offer—the group’s deadline is 9 August 9. It will also have to be passed by shareholders, who are due to vote on the proposed takeover on 16 August.”