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Supermarkets

Morrisons rejects £5.5bn CD&R takeover bid

Shares in the supermarket have since surged to 233p

Wm Morrison Supermarkets has rejected a £5.5bn takeover bid from the American private equity company, Clayton, Dubilier and Rice (CD&R).

Submitted on 14 June, CD&R’s offer was valued at 230 pence per Morrisons share for the entire share capital of the group.

However, following a valuation with the supermarket chain’s financial adviser, Rothschild and Co, it was “unanimously concluded” that the deal “significantly undervalued” the Morrisons brand.

In turn the board confirmed that it had “rejected the conditional proposal” on 17 June 2021.

Morrisons has since seen its share price spike to 233p at the beginning of trading on Monday 21 June, having closed at 178.45p on Friday 18 June.

While this has valued the company above the original CD&R approach, the private equity firm has until 17 July to either announce a firm intention to make another offer or reveal that it does not intend to table a further bid.

Following the offer, concerns have been raised by Labour regarding the possible risk for thousands of jobs at Morrisons should the company be taken over.

Seema Malhorta, the shadow minister for business and consumers, said: “Our supermarkets that play a role at the heart of our communities need owners that put the long-term interests of the business and its employees first.

“When Debenhams went bust we saw private equity firms walk away while employees lost their jobs and staff who have paid into the pension scheme were left out of pocket. Too often dodgy private equity firms load the companies with debt and leave while pocketing the dividends.”

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