Morrisons takeover: Fortress says competition watchdog not worried about bid

·2 min read
File photo dated 19/06/2020 of Morrisons trollies. Investment giant Apollo has said it considering launching its own bid to buy Morrisons after the supermarket chain agreed a �6.3 billion private equity takeover offer on Saturday. Issue date: Monday July 5, 2021.
Shareholders will vote on the bid on 16 August. Photo: PA

UK’s competition watchdog has said it is not concerned about SoftBank-backed Fortress Investment Group’s £6.3bn ($8.8bn) bid to take over supermarket Morrisons (MRW.L).

The Competition and Markets Authority “has no further questions in relation to the Fortress offer and, as at the date of this announcement, has not otherwise opened an inquiry, or indicated in writing that it is still investigating whether to open an inquiry,” said Bidco, a newly formed company indirectly owned by funds managed or advised by affiliates of Fortress.

“Bidco is not aware of any fact or circumstance, as at the date of this announcement, that would result in any delay in the satisfaction” of the regulator, its statement added.

Morrisons announced earlier this month it had agreed to a takeover by a consortium led by Fortress, following a rebuff of a £5.5bn offer from rival private equity house Clayton, Dubilier & Rice.

CD&R and any other bidders had until 17 July to table any counter offers.

Apollo Global Management (APO) — a third private equity group — was also considering bidding for Morrisons but it has dropped out of the race. It might join forces with Fortress, though.

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Shareholders will vote on the bid on 16 August. If the bid goes through, investors will get 254p a share.

"A number of shareholders publicly state their opposition to the current offer,” said William Woods, senior analyst at European Food Retail, European Food Delivery at brokerage firm Bernstein..

“They object to the speed of the deal, the price, the protection of assets and the rationale for needing to be private to unlock value," he said.

British money manager M&G earlier this week criticised the potential takeover for not reflecting the true value of the company.

"The company has experienced a successful management turnaround over the past five years and has a strong balance sheet," said Rupert Krefting, head of corporate finance and stewardship at M&G, which owns a 1.08% stake in Morrisons.

Morrisons' largest shareholder Silchester and JO Hambro, which owns a 1.93% stake, have also expressed similar concerns.

Morrisons is the UK's fourth largest supermarket and works as a supplier for Amazon's (AMZN) Prime and Fresh offerings in the country. 

It is seen as an attractive acquisition target because it owns a large amount of property in the UK.

Disclosure: Apollo Global Management has agreed a deal to buy Yahoo Finance UK as part of a broader transaction with current owners Verizon. The deal has yet to close.

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