Oct 2, 2021

CD&R triumphs in £10bn Morrisons battle

US private equity group Clayton, Dubilier and Rice has triumphed in the four-month long takeover battle for Wm Morrison with a bid of £9.97bn including debt for the UK's fourth-largest supermarket. The winning bid of 287p a share was 2p a share above CD&R's existing offer and just a penny above the 286p offered by a consortium led by SoftBank-owned Fortress Investment. Its bid represented an enterprise value of £9.95bn. CD&R is paying a 61 per cent premium to the price of Morrisons' shares before the saga began, while the total transaction value is 11.8 times the group's underlying profit for the year to January 2021. The battle for Morrisons started behind the scenes in the spring and became public in early June, when the company confirmed that it had rejected a 230p a share approach from CD&R. For much of the summer, Fortress appeared to have the upper hand, securing a board recommendation for a 254p a share bid and then increasing it to 270p in order to head off a counterbid. The Morrisons marathon will generate a bonanza for investment banks, lawyers and public relations advisers in the City; according to the scheme documents from both sides, Morrisons will spend about £56m on financial and legal advice, while CD&R's bill is expected to reach about £63m. Fortress expects to spend £53m. CD&R will now spend millions more arranging a multibillion-pound debt package to help finance the takeover.

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