Several weeks after it rejected a much lower proposal from a private US equity firm, Britain’s fourth-largest supermarket chain Morrisons has agreed to a £9.5 bln takeover offer from a trio of investment groups led by Fortress, BBC reports.
Morrisons will be paid £2.52 per share according to the struck deal, backed by a 2 pence dividend after a buyout by Fortress, the Canadian pension fund CPPIB and a unit of Koch Industries with the group valuing the equity of Morrisons at £6.3 bln but the final offer also includes £3.2 bln of net debt.
US firm Clayton, Dubilier & Rice previously offered £2.30 per share – an unsolicited proposal Morrisons’ management rejected. The supermarket giant has revealed that it had also dismissed four previous proposals by Fortress.
Morrisons’ shares closed at 243 pence on Friday, bringing its total business value to £5.8 billion. The food supplier lost big during the COVID pandemic, with its 2020 profits cut in half, to £201m.
This halving of profits was a Badge of honour for Chief executive David Potts, as he said in March, since the company took up its role of feeding the nation during the pandemic when UK shops were required to stay open unlike other businesses while the benefits of higher sales were cancelled, leading to large costs.