Supermarket Morrisons snapped up in £6.3bn takeover deal

Morrisons supermarket has agreed to a £6.3 billion takeover bid from a consortium of investment groups.

The offer, led by Softbank-owned Fortress that has partnered with Canada Pension Plan Investment Board and Koch Real Estate Investments, will see shareholders receive 252p per share plus a 2p special dividend.

The all-cash offer is subject to shareholder approval and represents a 42 per cent premium on Morrisons’ share price before it was announced that the supermarket had rejected a takeover proposal from New York-based firm Clayton, Dubilier & Rice last month.

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Fortress has invested in grocery retail in both North America and Europe, and has invested in Majestic Wine in the UK.

The deal has been deemed the biggest shake-up in the UK grocery sector for more than a decade. Picture: Tolga Akmen/AFP via Getty Images.

Andrew Higginson, chairman of Morrisons, said: "The Morrisons directors believe that the offer represents a fair and recommendable price for shareholders which recognises Morrisons' future prospects.

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"Morrisons is an outstanding business and our performance through the pandemic has further improved our standing and enabled us to enter the discussions with Fortress from a hard-won position of strength.

"We have looked very carefully at Fortress' approach, their plans for the business and their overall suitability as an owner of a unique British food-maker and shopkeeper with over 110,000 colleagues and an important role in British food production and farming.

Morrisons says its directors believe the offer represents a 'fair and recommendable' price for shareholders. Picture: Tolga Akmen/AFP via Getty Images.

"It's clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons.

"This, together with the very clear intentions they have set out today, has given the Morrisons directors confidence that Fortress will support and accelerate our plans to develop and strengthen Morrisons further."

Joshua A Pack, managing partner of Fortress, said: "We fully recognise Morrisons' rich history and the very important role Morrisons plays for colleagues, customers, members of the Morrisons pension schemes, local communities, partner suppliers and farmers.

"We are committed to being good stewards of Morrisons to best serve its stakeholder groups, and the wider British public, for the long term."

Seema Malhotra, Labour's shadow minister for business and consumers, said: "Ministers must urgently work with Morrisons and the consortium to ensure that crucial commitments to protect the workforce and the pension scheme are legally binding, and met.

"Ministers must also ensure legal promises are made about the integrity and future of the business, including any impact on the supply chain and distribution centres."

Major shake-up

Richard Lim, chief executive of research consultancy Retail Economics, also commented, stating: "This signals the biggest shake-up in the UK grocery sector for over a decade.

"Success will hinge on the new owners gaining the support of experienced key members of the leadership team to execute on the future strategy. This will be critical given the pace of change sweeping through the industry."

Adrian Jones, Unite national officer representing Morrisons’ warehouse and distribution workers, said: "We won't allow another takeover of a strong UK business see the workers trampled over as the boardroom and shareholders rush towards their bonanzas.

"Morrisons is unique in UK supermarkets in that it owns its supply chain, from the farm to the warehouse.

"Unite will meet urgently with the management team to turn their promises that the workers' jobs and terms will not be undermined into unbreakable guarantees. Only with such cast-iron guarantees can there be any hope of Unite and our members cooperating with this sale."

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