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Morrisons private equity takeover: a timeline

The transaction is expected to be carried out in the fourth quarter of 2021 but a lot could happen before then

Wm Morrison Supermarkets PLC - Morrisons private equity takeover: a timeline

Wm Morrison Supermarkets PLC (LON:MRW) suitors are still on time to put forward their offers if they want to beat Fortress.

Last Saturday, the grocer came out in favour of a 254p per share (which includes a 2p special dividend) offer from a consortium led by the private equity group, valuing the company at £6.3bn.

READ: Morrisons may receive one or two further bids, reckons Barclays

The transaction is expected to be carried out in the fourth quarter of 2021, but it first needs to be approved by shareholders.

A meeting date has not been set out yet, but Morrisons will publish a scheme document containing more information and a detailed timeline over the next three weeks (28 days from Saturday’s announcement).

The City reckons one or two more bidders will table their proposals, with Clayton, Dubilier & Rice (CD&R) and Apollo Management expressing their interest.

CD&R, which got a 230p a share offer rejected by the board a few weeks ago, signed a confidentiality agreement so it can access commercially sensitive data, The Telegraph reported.

According to London's takeover code it has until 17 July to make a new offer or pull out the race.

“We struggle to make the economics add up for a deal above 280p, unless a potential buyer is prepared to take a more robust approach to property sale and leasebacks, or is very optimistic about potential synergies with other assets they might own,” analysts at Barclays said.

Hedge funds are left out of the equation as the market has already priced in a higher offer. They would normally jump in with opportunistic offers but they haven’t made trades above £65mln, which is a low threshold considering Morrisons is now worth £6bn.

“You are already pricing in an increased bid from CD&R. If you are going to get involved, then you need to think that this is going to get out of control,” a hedge fund source told the paper.

Shares were flat at 266.53p on Thursday afternoon, having surged 47% in the year to date.

Quick facts: Wm Morrison Supermarkets PLC

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