The CEO of Morrisons is to meet with business secretary Kwasi Kwarteng next week to discuss the potential takeover of the business by a consortium led by an US investment firm.
According to The Times, Kwarteng has asked CEO David Potts to explain the reasoning behind the company’s decision to accept the £6.3bn takeover offer.
It comes as Kwarteng has expressed that he sees Morrisons as a “significant business” due to the fact it employs over 130,000 people and its history as a British company.
The paper reports that Morrisons chairman, Andy Higson, has had a number of meetings with investors over the past week to also explain the reasoning behind the decision.
In response to Fortress’ offer, shares in Morrisons jumped 11% at the start of trading in London as investors prepare for a bidding war over the supermarket giant
US private equity group Apollo has confirmed to the City that it is in the early stages of considering a bid.
This further raises the possibility of a three-way battle for Morrisons as it is speculated that CD&R will position a follow-up bid following the supermarket board’s rejection of their previous one.
In a statement at the time, Apollo said: “Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”) notes the recent press speculation in relation to Morrisons and confirms that it is, on behalf of certain investment funds managed by it, in the preliminary stages of evaluating a possible offer for Morrisons.
“No approach has been made to the board of Morrisons. There can be no certainty that any offer will be made, nor as to the terms on which any such offer might be made.”
Following the board’s decision, Morrisons said: “Fortress has observed Morrisons’ strong operational and financial performance, both during and prior to the Covid-19 crisis.
“Fortress has followed Morrisons’ development with strong interest and has dedicated significant resources to developing a thorough understanding of Morrisons’ positioning and long-term potential.”
It added: “Further, Fortress views Morrisons’ vertically integrated model, substantial focus on grocery retail and nimble and entrepreneurial approach to strategic partnerships (including with small suppliers, farmers and local communities) as clear differentiators and an excellent basis for continued, long-term growth.”