Morrisons, a prominent British supermarket chain, has accepted an improved takeover offer from a consortium led by Softbank-owned Fortress Investment Group. This new offer, valued at £6.7 billion ($9.3 billion) in cash, includes a price of 270p per Morrisons share and a special dividend of 2p per share. The decision to accept this offer comes in response to a potential counter offer from US private equity group Clayton, Dubilier & Rice (CD&R). Fortress remains determined to become the new owner of Morrisons and ensure its long-term success. The Morrisons board has reaffirmed its unanimous recommendation of the offer.

Previously, on July 3, the board agreed to a Fortress offer worth 254p per share, or a total of £6.3 billion. However, major Morrisons investors, including Silchester, M&G, and JO Hambro, expressed dissatisfaction with the offer, considering it too low. Morrisons also rejected CD&R’s proposal of 230p per share (£5.52 billion) on June 17. The Takeover Panel, the regulatory body for corporate takeovers in the UK, has set a deadline of August 9 for CD&R to make a revised offer.

Despite the improved offer from Fortress, Morrisons shares rose 2.5% to 278.75p, indicating the hope for a higher bid to emerge. Shareholders are scheduled to vote on the Fortress bid on August 16, and it requires the support of shareholders representing at least 75% of voting investors at the meeting to pass. Speculation remains that Amazon, with its partnership with Morrisons, may still enter the competition.

This deal is a significant development in the supermarket industry, given Morrisons’ status as one of the largest grocery retailers in the UK. The takeover bid highlights the interest of private equity firms in the sector and underscores the potential for further consolidation in the future. It also emphasizes the value attributed to established brands like Morrisons, which continue to attract attention from investors seeking long-term growth opportunities.

If the Fortress bid proves successful, the future of Morrisons will be in the hands of the consortium led by Fortress Investment Group. The plans they have for the company’s evolution and strategic direction will be closely monitored by stakeholders and industry observers. As the supermarket landscape continues to evolve and adapt to changing consumer preferences, Morrisons will need to navigate challenges and seize opportunities to stay competitive in the market.

Overall, the agreement between Morrisons and Fortress represents a significant development in the ongoing takeover saga. It remains to be seen whether CD&R will present a revised offer before the August 9 deadline or if other interested parties, such as Amazon, will submit competing bids. The outcome of this transaction will undoubtedly have implications for the future of Morrisons and the wider supermarket industry.

Useful links:
BBC: Morrisons agrees to £6.7bn takeover bid
The Guardian: Morrisons agrees to upped £6.7bn takeover bid from Softbank-led group