// The private equity suitor seeking to buy Morrisons should increase its offer to £6.5bn
// Clayton, Dubilier & Rice (CD&R) must hike its bid from 230p per share to 270p if it wants to seal the deal
// JO Hambro Capital said offers approaching 270p a share “merit engagement and consideration”
A top Morrisons shareholder seeking to buy Morrisons should increase its offer to £6.5 billion if it wants the takeover to succeed, a fellow private equity suitor said.
Morrisons stock has soared this month after the grocer rebuffed a 230p-per-share offer from Clayton Dubilier & Rice (CDR), saying it “significantly undervalued” the business.
Now JO Hambro Capital, the tenth biggest shareholder with three per cent, said offers approaching 270p a share “merit engagement and consideration”.
It said CDR should pay “a fair price” to access the benefits of combining Morrisons’ petrol station business with its Motor Fuels Group.
The combined company would have around 1200 forecourt sites across the UK.
This price could rise to 280p or above, if the private equity firm pursued a sale and leaseback of Morrisons stores to pay dividends or fund aggressive expansion.
CDR has until July 17 to make an improved bid, or it will be required to step away for six months.
Morrisons’ 11th largest shareholder, Legal & General slammed the bid, saying CDR would not add “any genuine value”.