Leahy’s private equity group snaps up Morrisons for £7bn: Clayton Dubilier & Rice strikes deal to buy UK grocer for 285p a share
Sir Terry Leahy looks set to make a dramatic comeback into British supermarkets following a £7billion bid for Morrisons.
Private equity group Clayton Dubilier & Rice – which counts the former Tesco chief executive as a key adviser – last night struck a deal to buy Morrisons for 285p a share.
The offer trumped an earlier 272p a share bid worth £6.7billion from rival private equity group Fortress and puts CD&R in pole position to seize control of the British grocer.
Private equity group Clayton Dubilier & Rice – which counts the former Tesco boss Sir Terry Leahy (pictured) as a key adviser – last night struck a deal to buy Morrisons for 285p a share
Leahy, 65, is understood to have been instrumental in the deal.
The agreement, announced last night after the stock market closed, will spark speculation that Leahy could take a place on the Morrisons board – possibly as chairman.
Unveiling the deal, he said: ‘CD&R is delighted to have the opportunity to support the management of Morrisons in executing their strategy to grow and develop the business.
‘The grocery sector in the UK is undergoing great change and we believe Morrisons is well placed, with CD&R’s support, to succeed in this environment. CD&R values Morrisons’ distinctive business model and is committed to supporting it.’
The battle for Morrisons started back in June when CD&R offered 230p per share, or £5.5billion.
This was countered by private equity rival Fortress which offered 254p per share, or £6.3billion in July. Fortress then sweetened its own bid to 272p per share or £6.7billion two weeks ago.
The Morrisons board had backed the Fortress bids. But last night it swung behind CD&R and Leahy.
Morrisons chairman Andrew Higginson said: ‘The Morrisons board believes that the offer from CD&R represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders.
‘CD&R have a strong record of developing, strengthening and growing the businesses that they invest in and they share our vision for Morrisons’ future.
‘This, together with the strong set of intentions that they have set out today, gives the Morrisons Board confidence that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business.’