The 10 billion pound battle for Britain’s fourth largest grocer will be decided in a shootout between two rivals Morrison Call on the acquisition team to resolve the three-month bidding war.
US private equity group Clayton, Dubilier & Rice (CDR), advised by former Tesco boss Sir Terry Leahy, A consortium led by a fortress will face each other head-on in the auction.
The supermarket, led by David Potts, said today that since neither company has announced a final bid: “The competitive situation continues.”
The announcement of the acquisition team is now expected to determine the final offer deadline later this month, and then shareholders will vote on the UK’s largest privatization transaction in at least a decade in the week of October 18.
Taking into account its net debt of 3.2 billion pounds, it valued Morrison at 9.9 billion pounds.
As investors bet on the prospect of rising quotations, the grocery store’s share price rose 1.66 pence today to 292.76 pence. Independent retail analyst Nick Bubb estimates that bids will reach at least 300 pence.
The news of the auction is the latest turning point in Morrison’s fierce battle, which has aroused people’s interest due to the huge amount of cash it generates and the £6 billion real estate investment portfolio.
Today’s update is released before Morrison announces its first-half results tomorrow, which should indicate whether sales growth remains strong after the blockade is relaxed.
Morrison stated that its board of directors “continues to take the broader responsibility of ownership very seriously [which] This includes acknowledging the importance of all stakeholders to Morrison’s business, including colleagues, customers, pension trustees and suppliers, as well as unique heritage and history.”
In other merger and acquisition news, British defense champion Ultra Electronics today announced a formal proposal for a £2.6 billion acquisition by its US private equity-backed competitor Cobham, despite increasing opposition to the transaction.
Ultra announced that it plans to hold a general meeting of shareholders on October 4 and vote to approve the transaction. Opponents claim that the transaction will have a negative impact on British national security and pose risks to the British defense industry.
