- The battle for Wm Morrison Supermarkets Plc looks set to drag on for at least a few more weeks after Clayton Dubilier Rice LLC secured an extended deadline to bid for Britain's fourth largest grocer.
The UK's Takeover Panel has confirmed a new deadline of 20 Aug for the buyout firm to 'put up or shut up' in a statement on Monday. CD&R asked to change the date from September 9 after rival Fortress Investment Group pre-emptively raised its offer to Morrison to 6.7 billion pounds on Friday.
CD&R's last bid was rejected by Morrison Management in June and it may face an uphill battle against Fortress, which pledged not to carry out material sales and leasebacks of the Grocer's real estate portfolio.
If Fortress doesn't come back with a higher bid, shareholders will vote on CD&R's offer on Aug. 27. Shares of Fortress rose as much as 1.1% in London on Monday and remain above Morrison price, indicating the market still expects CD&R to come back with a better offer.
Wins U.K. Grocer Morrison in battle to take CD&R R and D for additional ping
The events over the last few days mark some of the latest twists in an increasingly heated battle for Morrison.
Buyout firms are vying for the British grocer in part because of its real estate portfolio - it owns about 90% of its almost 500 stores. The business, led by Chief Executive Officer David Potts, also generates large amounts of cash and has a pension surplus and underlying debt. The fortunes of leading supermarkets have also improved after lockdowns triggered a surge in grocery spending.
On Friday, Fortress, already sitting on a recommended bid of 254 pence a share, decided to raise its offer to 270 pence a share plus a 2 pence dividend, even though CD&R had yet to show its hand. It made the move not only to increase pressure on CD&R, but also because some shareholders were unhappy with Fortress's original bid.
Silchester International, M&G Plc and J O Hambro Capital Management, investors who together control almost 20% of Morrison, said Fortress's initial proposition didn't reflect the true value of the company.
The Fortress bidding group includes the billionaire Koch family, Singapore sovereign wealth fund GIC and Canada Pension Plan Investment Board. Apollo Global Management Inc., which was close to controlling the majority of British grocer Asda, has said it's considering joining the Fortress consortium.
The CD+R bid is being led by Terry Leahy, a former CEO of Tesco Plc, UK's largest grocer He has a long history with most of the Morrison management team, including Potts and chair Andy Higginson, who spent much of their careers at Tesco.