Future of Morrisons supermarket chain has been decided

The private equity firm Clayton, Dubilier & Rice has won the battle to buy the Morrisons supermarket chain after bidding £ 7 billion at auction on Saturday.

The auction process in the fight to buy the Morrisons supermarket is over, the takeover committee announced to the exchange.

Upon completion, private equity giant Fortress offered 286p per Morrisons common share and rival Clayton, Dubilier & Rice (CD&R) offered 287p.

The takeover saga has dragged on since CD&R first approached the Bradford grocer in June.

CDR senior advisor Terry Leahy is a former Tesco chief executive.

Morrison’s board of directors is expected to recommend that shareholders accept the offer.

This ends a takeover saga that has dragged on since CD&R first took an approach to the Bradford-based grocer in June, leading to speculation that the sector was ripe for private equity buyouts.

Following the offer in June, Softbank-backed rival Fortress made an offer of £ 6.3 billion in July.

But shareholders felt this was too low and Fortress, which owns Majestic Wines, returned a month later with an increased offer of £ 6.7 billion, which the board accepted.

Later that month, CD&R returned with an increased offer of £ 7 billion, which resulted in the board withdrawing its support for the Fortress offer and putting its weight behind the higher offer.

Both sides have stressed their desire to uphold the values ​​of the supermarket and tried to stave off proposals that they would sell large chunks of the company’s property.

Supermarkets typically rent real estate, while Morrisons still owns around 90% of its property.

There were also concerns that any new owner could lower the supermarket’s tax burden as offshore shell companies were formed prior to the takeover.

Morrisons’ pension trustees need to be consulted, despite saying earlier this month that an agreement has been reached with (CD&R).

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