Morrisons rejects £5.5bn CD&R takeover proposal

Bradford-based supermarket giant Morrisons has rejected a proposed £5.5 billion cash offer from U.S. private equity firm Clayton, Dubilier & Rice (CD&R), saying it is far too low.

Morrisons said on Saturday it rejected a proposed cash offer of £2.30 a share from CD&R.

Morrisons shares closed on Friday at about £1.78.

Morrisons said the “unsolicited highly conditional non-binding proposal” which was received on June 14 “significantly undervalued Morrisons and its future prospects.”

Morrisons has a current stock market value of about £4.3 billion and employs about 110,000 staff.

Silchester International Investors, one of the UK’s biggest boutique asset managers, is the largest shareholder of Morrison with a 15% stake.

Morrisons said in a statement: “The board of Morrisons evaluated the conditional proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the conditional proposal significantly undervalued Morrisons and its future prospects.

“Accordingly, the board rejected the conditional proposal on 17 June 2021.”

CD&R had said earlier on Saturday it was considering a possible cash offer for Morrisons.

Under UK takeover rules, CD&R has until July 17 to announce a firm intention to make an offer.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.