// Morrisons backs a £7bn offer from US private equity group CD&R
// The grocer had accepted an offer of 285p per share from the private equity firm
// Morrisons chair Andrew Higginson said the offer represented “good value for shareholders”
Morrisons has agreed a £7 billion takeover by US private equity group CD&R, in the latest round of fighting for control of the UK’s fourth largest grocer.
The supermarket chain confirmed on Thursday night that it had accepted an offer of 285p per share from the private equity firm that trumped the offer from rival suitor Fortress.
In June, Morrisons rejected CD&R’s original 230p a share gambit – worth £5.5 billion – on the basis that it “significantly undervalued” the retailer.
READ MORE: Rival looks to top Fortress bid for Morrisons
Its new offer is a 60 per cent premium to the Morrisons share price on June 18, the day before news of bid interest in the company first made public.
Morrisons chairman Andrew Higginson said the CD&R offer represented “good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders”.
“CD&R have a strong record of developing, strengthening and growing the businesses they invest in,” Higginson said.
“This, together with the strong set of intentions they have set out today, gives the board confidence that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business.”
Former Tesco chief executive, Sir Terry Leahy is one of CD&R’s senior advisers and has worked alongside Higginson and Morrisons chief executive David Potts.
Leahy said CD&R were excited about working with Potts and the rest of the management team to “create more success for all of its stakeholders”.
As part of the deal’s terms, CD&R has promised that the company’s head office will remain in Bradford.
It said it had no plans to sell off its valuable store estate to raise cash, and that it was fully supportive of Morrisons’ recent pay award of at least £10 an hour for all colleagues in stores and manufacturing sites. It also did not intend to make any change to the benefits provided by its pension schemes.
In a statement on Thursday night, Fortress noted developments and said it was “considering its options”.
The Morrisons board has withdrawn its previous backing of the Fortress offer, with shareholders expected to be asked to vote on the improved CD&R offer in October.
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