The board of UK retailer Morrisons has accepted a £7 billion offer from US private equity group Clayton, Dubilier & Rice (CD&R), which tops the previous deal agreed with Majestic’s owner, Fortress Investment Group.
The offer of 285p per share, marks a considerable increase on its original 230p-per-share offer back in June, which would have valued the grocer at £5.5bn, which was refused but marked the start in a race for the grocer.
In July, the retailer accepted a £6.3m bid by a consortium bed by SoftBank-owned Fortress Investment Group, the owner of wine retailer Majestic. Within days private equity company The Apollo Group, said it was considering entering the fray, only to back out a few weeks later.
The board have now withdrawn support for the Fortress offer in favour of CD&R.
Andrew Higginson, chair of the Morrisons board, said the CD&R offer represented “good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders”.
The US private equity firm, which is based in New York, previously held a 60% stake in retail group B&M between 2013 and 2018. According to CityAM, the firm have been advised by former Tesco chief executive, Sir Terry Leahy over the past 10 years.
In a statement, CD&R said it recognised the legacy of Sir Ken Morrison, who took the small grocery chain set up by his father, and turned it into one of the UK’s largest retailers during his 50 year tenures, as well as Morrisons’ heritage, history and culture, which is said was “core to Morrisons and its approach to grocery retailing”.