Morrisons’ price tag set to soar over £7bn as Britain’s fourth biggest grocer goes up for auction
An auction for Morrisons this weekend will send the supermarket’s price tag soaring above £7billion.
The Takeover Panel said it would run up to five rounds of bidding on Saturday to determine the outcome of a four-month takeover battle between US private equity predators Clayton, Dubilier & Rice (CD&R) and Fortress.
The result will be announced by Monday morning, although the process could also be scrapped if either side state they will not increase their offers.
On the block: The Takeover Panel said it would run up to five rounds of bidding to determine the outcome of a four-month private equity takeover battle for Morrisons
The auction will pit former Tesco boss Sir Terry Leahy, who is fronting the CD&R bid, against American rival Joshua A Pack in a high-stakes showdown.
The duo have been vying for control of Britain’s fourth largest supermarket chain since the summer.
Confirmation the auction would go ahead pushed Morrisons shares up 1.4 per cent, or 4p, to 296p, valuing the Bradford-based group at nearly £7.2billion.
The bidding war has seen an initial offer of £5.5billion by CD&R turned down before the Morrisons board backed a £6.3billion deal with Fortress.
Then Fortress raised its bid to £6.7billion before it was trumped by a fresh offer from CD&R worth £7billion.
With the battle now heading to auction, the price tag is set to rise again, unless no party increases its bid.
The auction will pit former Tesco boss Sir Terry Leahy (pictured), who is fronting the CD&R bid, against American rival Joshua A Pack in a high stakes showdown
One analyst, from Canaccord Genuity, has predicted a higher price, saying the board should have held out for a bid of 314p per share, or £7.6billion.
Leahy, 65, is British business royalty, a man who worked his way up from a council estate in Liverpool to run Tesco for 14 years.
Pack, 47, is a chisel-jawed American go-getter and a father of four. In his 19 years at Fortress he has amassed a huge fortune and this year bought a £17million mansion in Dallas.
Both sides have been keen to stress they want to uphold the supermarket’s values and have attempted to ward off suggestions they will sell off the company’s freeholds, amidst harsh criticism from across the City and Westminster.
They have also pledged to support the Morrisons pension scheme, with CD&R reaching an agreement with the trustees over funding arrangements.
Asda – another of the big four supermarkets in the UK, along with Morrisons, Sainsbury’s and Tesco – fell into private equity hands last year when it was taken over by the billionaire Issa brothers backed by TDR Capital.
A host of other British firms have been targeted by private equity since the onset of the pandemic including security firm G4S and defence group Ultra Electronics.