Britain's Morrisons agrees $8.7B takeover by Fortress-led group
Morrisons, the U.K.'s fourth-largest supermarket group, has agreed to a takeover led by SoftBank-owned Fortress Investment Group that values Britain's fourth-largest supermarket chain at £ 6.3 billion (US$8.7 billion) and tops a rival offer from a U.S. private equity firm.
The offer from Fortress, along with Canada Pension Plan Investment Board and Koch Real Estate Investments, exceeds a 5.52 billion pound unsolicited proposal from Clayton, Dubilier & Rice (CD&R), which Morrisons rejected on June 19.
However, it was less than the 6.5 billion pounds asked for by top 10 Morrisons investor JO Hambro last week.
Shareholders will get to vote on the Fortress offer, which gives the supermarket chain an enterprise value of 9.5 billion pounds once its net debt of 3.2 billion is taken into account.
Under British takeover rules, CD&R has until July 17 to come back with a firm offer. CD&R declined to comment.
Analysts have also speculated that other private equity groups and Amazon, which has a partnership deal with Morrisons, could enter the fray in a potential bidding war.
The Fortress deal underlines the growing appetite from private funds for British supermarket chains, which are seen as attractive because of their cash generation and freehold assets.
On Monday, the bid battle ratcheted up when a third private equity group, Apollo Global Management, entered the fray.
U.S. group Apollo, which last year missed out on buying Asda, the No. 3 grocery player in the United Kingdom, said it was in the preliminary stages of evaluating a possible offer for Morrisons but had not approached its board.