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Morrisons shareholders to vote for £7.1bn offer by auction winner Clayton, Dubilier & Rice

Published: 07:48 04 Oct 2021 BST

Wm Morrison Supermarkets PLC - Morrisons shareholders to vote for £7.1bn offer by auction winner Clayton, Dubilier & Rice

Wm Morrison Supermarkets PLC (LSE:MRW) will be bought by US private equity firm Clayton, Dubilier & Rice (CD&R) after it won an auction on Saturday.

The group offered 287p per share, equating to £7.1bn, while fellow suitor Fortress proposed 286p per share.

READ: Morrisons: it’s showtime on Saturday as bidders regroup for final auction

The final price is a premium of 61% to the closing price on 18 June, the last trading day before CD&R put forward its first bid. Shareholders are due to vote on 19 October.

If it goes ahead, CD&R senior adviser Terry Leahy will return to the UK grocery sector, having led Tesco PLC (LSE:TSCO) as a chief executive between 1997 and 2011. He worked there with now Morrisons chairman Andrew Higginson and chief operating officer Trevor Strain.

“CD&R have good retail experience, a strong record of developing and growing the businesses in which they invest, and they share our vision and ambition for Morrisons. We remain confident that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business,” Higginson commented.

The potential new owner previously vowed to retain Morrisons' Bradford headquarters and the existing executive team, led by boss David Potts, who is in for a £10mln payday if a takeover goes ahead.

It also said it would not sell the freehold store estate nor change staff pay rates, although none of these commitments is legally binding.

Labour and Lib Dem politicians have called on the current government to ensure these terms are maintained.

“It would be a great shame to see local teams lose their stake in the future direction of the business,” Sarah Olney, Lib Dem MP and the party’s spokesperson for business, was reported as saying by The Guardian.

“With uncertain economic times ahead, the new owners must pass the key tests of not loading the business with debt, not cutting jobs, and critically, protecting existing working conditions.”

“The UK remains a very attractive investment environment from many perspectives, and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value,” commented Joshua A. Pack, managing partner of Fortress.

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