London — Morrisons has agreed to a SoftBank-owned Fortress Investment Group-led acquisition. That’s £ 6.3 billion ($ 8.7 billion) for the UK’s fourth-largest supermarket chain, outpacing rival offers from private-equity firms in the United States.
The offer from Fortress, along with Canada Pension Plan Investment Board and Koch Real Estate Investments, surpasses Morrisons’ £ 5.52 billion unsolicited offer from Clayton, Dubilier & Rice (CD & R), which it rejected on June 19.
But last week it was less than £ 6.5bn requested by Morrisons’ top 10 investor JO Hambro.
Shareholders can vote for a Fortress offer that gives the supermarket chain £ 9.5 billion in corporate value, taking into account £ 3.2 billion in net debt.
Under UK takeover rules, CD & R must return a firm offer by July 17. CD & R declined to comment.
Analysts also speculate that Amazon, which has partnership agreements with Morrisons with other private-equity groups, may participate in a potential bidding war.
Fortress trading underscores the growing desire of private funds for UK supermarket chains. UK supermarket chains are considered attractive for cash generation and free-holding assets.
“We are a unique UK food manufacturer and shopkeeper owner with a fortress approach, business planning, and an important role in UK food production and agriculture with over 110,000 colleagues. We considered the suitability very carefully, “says Morrisons. Chairman Andrew Higginson.
“It is clear that the fortress fully understands and understands the basic character of Morrisons.”
Fortress, an independent subsidiary of SoftBank Group Corp. of Japan, is a global investment manager with approximately $ 53 billion in assets under management as of March. I bought Majestic Wine, a British wine seller, in 2019.
Managing partner Joshua A. Puck said:
However, Britain’s opposition Labor Party called for close scrutiny from the government.
“The Minister needs to work urgently with Morrisons and the Consortium to ensure that important commitments to protect the workforce and pension system are legally binding and fulfilled,” Cima said. A worker spokeswoman for Malhotra’s business said.
The fortress will maintain its Bradford headquarters in Morrisons, northern England, and its existing management team, led by CEO David Potts, to implement existing strategies. There are no plans to sell or leaseback the material store.
Potts earns £ 9.2m by selling his stake to Fortress, and Chief Operating Officer Trevor Strain puts £ 3.6m in his pocket.
Under the terms and conditions recommended by Morrisons’ Board of Directors to shareholders, investors will receive 254p per share (252p in cash and 2p in special cash dividend). The CD & R proposal was 230p per share.
Morrisons started in 1899 as an egg and butter merchant. Today, it follows the annual sales of UK market leaders Tesco, Sainsbury’s and Asda.
Morrisons owns 85% of its approximately 500 stores, most of which have 19 free-owned manufacturing sites. It is unique among British supermarkets in that it manufactures more than half of the fresh food it sells.
The fortress offer said it represented a 42 percent premium over the closing price of 178p on June 18, the day before the CD & R proposal. Friday’s stock closed at 243p.
Morrisons said the first one-sided proposal was received from the fortress on May 4 at 220p per share. This offer was not published. The fortress then made four subsequent proposals before offering a total value of 254 per share on June 5.
Morrisons’ bid follows Zuber and Mohsin Issa, as well as private equity firm TDR Capital, buying a majority stake in Asda from Wal-Mart in February. The deal valued Asda at £ 6.8 billion.
The deal followed Sainsbury’s failure to acquire Asda after the agreed deal was thwarted by British competition regulators in 2019.
In April, Czech billionaire Daniel Cretinsky raised its stake in Sainsbury’s to nearly 10%, igniting bid speculation.