Morrisons rejects £5.5bn takeover offer from private equity Company

Morrisons has refused a 5.5bn takeover bid from a private equity company, presuming it might have”significantly undervalued” the organization.

Private equity firm Clayton, Dubilier & Rice (CD&R) had previously said it was contemplating a possible cash offer for its supermarket chain.

Morrisons said it refused a conditional cash offer from CD&R of 230p percent — that amounts to just over #5.5bn.

Morrisons said:”The committee of Morrisons assessed the conditional proposal with its financial advisor, Rothschild & Co, and concluded the German proposal substantially undervalued Morrisons and its future prospects.

“Thus, the board refused the proposal on 17 June 2021.”

CD&R had previously said in a statement it” notes that the media speculation regarding a possible transaction involving Morrisons and affirms it is considering a possible cash offer for the issued and to be issued share capital of Morrisons”.

It stated there was no certainty that an offer could be made.

CD&R’s announcement followed a Sky News report in which it was made a preliminary bid approach into the supermarket group’s board which could appreciate Morrisons at #5.5bn.

Shares in Morrisonsdown 3 percent during the previous year, closed on Friday in 182p, valuing the group in #4.33bn.

Bidding for Morrisons could have followed Walmart’s current sale of a vast majority stake in Asda into the Issa brothers and private equity company TDR Capital.

That deal appreciated Asda at £6.8bn and followed closely Sainsbury’s failure to shoot over Asda following an agreed agreement that has been blocked by Britain’s competition regulator in 2019.

Morrisons has a partnership arrangement with Amazon and there’s been persistent speculation that it might emerge as a potential bidder.

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