Morrisons to have new owner after US firm wins £7,000,000,000 auction

A buyer for the supermarket chain Morrisons has finally been chosen after a months-long takeover saga.

U.S. private equity group Clayton, Dubilier & Rice (CD&R) has won the auction for the UK’s fourth biggest supermarket group, outbidding rival Fortress Investment.

The Takeover Panel, which governs these sorts of deals in the UK and arranged the auction, said on Saturday CD&R had offered 287 pence a share, while a consortium led by the Softbank owned Fortress offered 286 pence. 

This amounts to a winning offer of nearly £7billion.

CD&R’s victory marks a triumphant return to the UK grocery sector for Terry Leahy, the former chief executive of Britain’s biggest supermarket chain Tesco, who is a senior adviser to the firm.

Both firms submitted bids over the summer with both looking likely to win at different times.

It was decided a final bid would be decided at a five round auction on Saturday.

CD&R’s auction offer is only slightly higher than the 285 pence a share offer that was recommended by Morrisons’ board in August.

The board, which will meet on Saturday, is now expected to recommend shareholders accept the new offer at a shareholder meeting slated for October 19.

If shareholders approve the offer CD&R could complete its takeover of Morrisons by the end of the month, the second UK supermarket chain in a year to be acquired by private equity after a buyout of Asda completed in February.

During the process, both sides pledged to uphold Morrisons’ values. They have also stressed that they do not plan to sell off vast swathes of the company’s stores.

In contrast to most major supermarkets, who lease their shops, Morrisons owns around 90% of its estate.

There have also been concerns that any new owner may reduce the supermarket’s tax bill, with off-shore shell companies set up ahead of the takeover.

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