Fortress Investment Group is leading the race as rivals consider bids
Morrisons looks set to be taken over following a bid of £6.3m for the supermarket chain by a consortium that appears to have beat the competition to the finish line.
Fortress, the private equity firm leading the takeover race, seems to be at the front of the pack following its 254p-per-share offer.
Back in June, Morrisons rejected an offer of £5.5bn from a different consortium, adding that it was an undervaluation of the company.
The business consists of just under 500 stores and over 110,000 employees across the UK.
Fortress Investment Group took over Majestic Wine in 2019 for £95m and is working with Koch Industries and the Canadian pension fund CPPIB to secure the Morrisons deal. In addition to debt, their offer will amount to £9.5bn.
In addition to Fortress’ offer, which has been deemed acceptable, the investor promised to support the supermarket’s exit strategy, keep its head office in Bradford and protect employees’ pension rights.
Just this morning, an American private equity firm, Apollo Global Management, confirmed it is evaluating a potential bid, intensifying the battle for Morrisons.
“Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”) notes the recent press speculation in relation to Morrisons and confirms that it is, on behalf of certain investment funds managed by it, in the preliminary stages of evaluating a possible offer for Morrisons,” the company said.
“No approach has been made to the Board of Morrisons. There can be no certainty that any offer will be made, nor as to the terms on which any such offer might be made.”
Morrisons first existed as a market stall in Bradford in 1899 owned by William Morrison. His son then took over the company and opened the first supermarket in the 1960s.
During the morning session on Monday, the Morrisons share price is up by 11.35% to 267.02p.
Susannah Streeter senior investment and markets analyst at Hargreaves Lansdown commented on the three-way battle for the UK grocer.
“With a trio of hungry firms circling, it shows there is a big appetite for a bite of the UK supermarket sector. W M Morrison is seen as a bargain compared to overseas peers, with its deep integrated supply chain and the fact that it owns much of its store estate,” she said.
“Morrisons is bounding ahead with digital sales, which were up by 113% last quarter. The company is already a prince in Amazon’s e-commerce empire, selling ranges via Prime and via the Amazon Fresh bricks and mortar store in West London, which gives it added reach. The tentacles of W M Morrison expand across multiply supply chains where innovative products are in development.”
