A battle for the future of Wm Morrison Supermarkets PLC (LSE:MRW) (LON:MRW) is underway as the grocer's largest investor slammed the recommended £6.3bn takeover by private equity group Fortress, which itself unveiled a further large member of its takeover consortium.
Silchester Asset Management, which owns a 15.1% stake in the Bradford-based chain, said on Tuesday night it was “not inclined to support” the 252p-per-share offer from the Fortress-led consortium.
READ: Morrisons document reveals bid advisers to bank £275mln
Silchester said that there was “little in the recommended offer that could not be achieved by Morrison as a listed company”, and the board should “allow more time to respond to other parties who might offer better value to Morrison’s public shareholders”.
According to independent retail analyst Nick Bubb, this is “certainly an embarrassing public rebuke for the board, for accepting the low-ball Fortress offer".
It seems designed to encourage a higher offer from Clayton Dubilier & Rice, Bubb added, with CD&R seeing its £5.5bn approach last month immediately rejected by Morrisons.
Meanwhile, Fortress announced on Wednesday morning that its consortium has been joined by GIC, the Singapore sovereign wealth fund.
With 75% of shareholder votes needed to approve the deal, it is starting to look very tough for chief executive David Potts and fellow board members ahead of the investors meeting on 16 August.
Earlier this month, the investment arm of Legal & General Group PLC (LON:LGEN), which owns a 2.8% stake, said it is important that the company isn’t taken over for the wrong reasons. The increasingly activist investor has expressed concerns that a private equity owner might buy the property portfolio “too cheaply” or levering Morrisons up with debt.
Shares were flat at 266.1p on Wednesday morning.