The £7 billion takeover battle for Bradford-based supermarket giant Morrisons between US private equity groups Clayton, Dubilier & Rice (CD&R) and Fortress Investment Group will be decided at an auction on Saturday, October 2.
The two US private equity firms will go head-to-head in up to five rounds of bids.
The UK’s Takeover Panel said on Wednesday that CD&R and Fortress Investment Group agreed to settle the matter in a one-day auction.
Last month, Morrisons agreed a £7 billion offer from CD&R — which has former Tesco boss Terry Leahy as an adviser.
The Morrisons board scrapped its earlier recommendation of a £6.7 billion bid from the consortium led by Fortress.
However, the Takeover Panel said: “On the basis that neither offeror has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist for the purposes of Rule 32.5 of the Takeover Code …
“In order to provide an orderly framework for the resolution of this competitive situation, and in accordance with Rule 32.5 of the Code, the Panel Executive has, at the request of the parties, established an auction procedure …”
CD&R’s offer was worth 285p a share in cash, trumping the 272p a share cash offer from the Fortress group. Morrisons shares have risen to around 296p.
Fortress, a subsidiary of SoftBank Group, is backed by a consortium that includes the Canada Pension Plan Investment Board (CPP Investments), Koch Real Estate Investments and Cambourne Life Investment, an investment vehicle of Singapore’s sovereign wealth fund GIC.