A top Morrisons shareholder said that New York bidder Clayton, Dubilier & Rice (CD&R) must pay “a fair price” for the supermarket.
One of Morrison’s top 10 investors J O Hambro has said that any potential bidder for the supermarket should raise its offer to £6.5bn if it wants the takeover to succeed.
Shares in the supermarket rocketed this month after it rejected a 230p-per-share takeover bid from CD&R, believing it would have “significantly undervalued” the company.
But offers approaching 270p per share should “merit engagement and consideration” by the grocer’s board, according to J O Hambro, which owns 3 per cent of Morrisons.
The shareholder said this was a “high-octane” approach that would “create a more volatile asset”.
J O Hambro backed the supermarket’s decision to rebuff the initial offer, that valued it at £5.5bn, and said that CD&R should pay a “fair price” to merge Morrisson’s petrol station arm with its Motor Fuels Group – a combined company that would create a forecourt giant with around 1200 sites across the UK.
“The fuel purchasing and food retailing synergies here are clear to see,” the shareholder said. “But CD&R should pay a fair price in order to access those synergies.”
CD&R has until July 17 to make a higher bid, or it must withdraw from the process for six months.
Amazon, as well as private equity firms Apollo, Lone Star and KKR, are all understood to be interested in a potential takeover of the supermarket, which J O Hambro said has “a growing reputation in convenience, wholesale and non-food retailing and a strong presence in forecourt retailing”.