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%.
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.