Bidding battle for Morrisons to be decided in auction takeover showdown

Morrisons is in talks with the stock market's Takeover Panel to launch a multi-billion-pound auction process for the supermarket chain.

Bosses hope to bring closure to the three-month battle for Britain’s fourth largest grocery business between two private equity firms, Clayton, Dubilier & Rice (CD&R) and Fortress.

In a statement to the stock market, Morrisons said that, on the basis that neither bidder has declared their offer final, "such that either offer may be further increased or otherwise revised, a competitive situation continues to exist".

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As a result, the company has started talking with the Takeover Panel and the bidders "in order to begin discussions around an orderly framework for the resolution of this competitive situation".

Morrisons is the fourth largest supermarket operator in the UK. Picture: Mikael Buck/MorrisonsMorrisons is the fourth largest supermarket operator in the UK. Picture: Mikael Buck/Morrisons
Morrisons is the fourth largest supermarket operator in the UK. Picture: Mikael Buck/Morrisons

An announcement by the Takeover Panel is expected shortly, with a date for later this month expected to be set when any bidders must make their offers final.

Shareholders will vote on the deal in or around the week of October 18, the supermarket chain confirmed.

Bosses continued to stress that any bidder must uphold the group's values.

The supermarket said: "In addition to the financial terms of any offer, the Morrisons board continues to place very significant emphasis on the wider responsibilities of ownership of Morrisons.

"These responsibilities include a recognition of the importance to the Morrisons business of all stakeholders, including colleagues, customers, pension trustees and suppliers as well as the distinct heritage and history of Morrisons and the legacy of Sir Ken Morrison."

The takeover process started in June with CD&R making a £5.5 billion bid for the business. This was followed by a bid of £6.7bn by Fortress and a counter bid of £7bn from CD&R.

Fortress said it "continues to consider its options" but has not made a further announcement.

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Morrisons shareholders appear to believe a new bid could be on its way, with shares trading above 290p despite CD&R's offer standing at 285p-a-share.

The potential takeover of Morrisons comes after the collapse of Sainsbury’s mega-merger with Asda in 2019 after competition officials blocked the deal.

Earlier this year, Asda agreed to sell a string of petrol forecourts in order to help its £6.8bn acquisition by the Issa Brothers and private equity backer TDR Capital secure approval from the regulator.

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