The two-week extension means that Clayton, Dubilier & Rice (CD&R) will have until 5pm on August 20 to either say what it wants to offer for Morrisons, or to walk away.
CD&R had originally been turned down by the Morrisons board over a potential £5.5 billion bid. In June the board said the offer “significantly undervalued Morrisons and its future prospects”.
Since then CD&R has been pondering whether it should increase its bid for the supermarket chain – the UK’s fourth largest, after Tesco, Sainsbury’s and Asda.
In this time it has been overtaken by a rival consortium led by private equity company Fortress.
Last month Morrisons’ board recommended Fortress’s £6.3bn bid for the business. On Friday that offer was increased to £6.7bn as Fortress tried to put CD&R off from making another offer.
CD&R originally had until 5pm on Monday to make a firm offer for Morrisons, or to walk away from the deal.
However, the Takeover Panel, which regulates acquisitions of listed companies, has now said it will give the US firm until 5pm on August 20 to make its bid.
It came after Morrisons announced that it would delay a shareholder meeting to vote on the Fortress offer until August 27, the panel noted.
It added: “This deadline will cease to apply if, before that time, a third party other than CD&R has announced a firm intention to make an offer for Morrisons.
“Each of Morrisons, Oppidum (the Fortress consortium) and CD&R has accepted this ruling.”
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.
In May, Morrisons noted that sales of fuel and food-to-go products had surged in recent weeks as an easing in lockdown restrictions fed through into consumers’ spending patterns.