Morrisons takeover battle reaches £7bn at auction

The battle for control of supermarket chain Morrisons (LON: MRW) is all but over, after the weekend’s auction saw bidding edge a little higher.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

British bank notes and coins

Image source: Getty Images

It looks like the battle for control of UK supermarket chain Morrisons (LSE: MRW), which kicked off back in June, is finally over. Investment rivals Clayton, Dubilier & Rice (CD&R) and Fortress Investment Group (owned by Softbank) had been slugging it out.

As neither bidder had declared their offer final, the Takeover Panel took the competition to auction at the weekend. CD&R’s winning bid of 287p per share came in ahead of the 286p offered by Fortress.

Investors had been pushing the Morrisons share price further, edging it up as high as 297p even as late as Friday. They were clearly anticipating better offers from the combatants. But now it’s all done and dusted, the shares opened Monday at 286p for a drop of 3.7%.

60% premium

Investors who held the shares prior to the start of the bidding war have done very nicely. The final deal represents a premium of approximately 60% over the market price at the time. It values Morrisons at £7bn, after the company’s board had rejected a previous offer from CD&R valuing it at £5.5bn.

The takeover marks the return of a familiar name to the UK supermarket sector, that of Terry Leahy. Sir Terry was previously chief executive at Tesco, and is now a senior adviser at CD&R.

Morrisons shareholder approval

The bid still needs the nod from Morrisons shareholders, with the board expected to recommend acceptance at a meeting on 19 October. If it goes ahead as expected, CD&R should take control in November.

In other news, the Sainsbury share price ticked up a couple of percent in early Monday trading.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Morrisons. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Smiling white woman holding iPhone with Airpods in ear
Investing Articles

Why I’d start buying shares with £250 today not £20,000 in future!

Is it worth waiting to start buying shares until one has more money to invest? Our writer doesn't think so…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

I’ve bought Diageo shares to boost my long-term passive income!

I plan to hold on to my Diageo shares well into retirement. Here's why I think it's a top stock…

Read more »

New virtual money concept, Gold Bitcoins
Investing Articles

Down 61%, are Argo Blockchain shares worth buying?

Argo Blockchain shares have tumbled in value. As a shareholder, Christopher Ruane considers what might come next for the business…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 UK dividend stocks with yields over 10%

These dividend stocks are the highest yielders on the UK market, says Roland Head. But how safe are these generous…

Read more »

Couple relaxing on a beach in front of a sunset
Investing Articles

I’d start buying shares for passive income with this pair

Our writer is looking to earn passive income via investing, and here are two leading stocks he might buy.

Read more »

Tanker coming in to dock in calm waters and a clear sunset
Investing Articles

Here’s the Shell dividend forecast through to 2024

The Shell dividend is still nearly 50% below 2019 levels. Will the oil giant use record profits to rebuild its…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

3 FTSE 100 stocks I think Warren Buffett might love!

Warren Buffett made his fortune thanks to the success of US shares. But here are three FTSE 100 stocks I…

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Down 75%, has the Deliveroo share price bottomed?

The last 12 months have been torrid for the Deliveroo share price. But does this open an opportunity to grab…

Read more »