The latest development in the bidding war for the vertically integrated supermarket chain saw the group oust Fortress Investment Group’s previous offer of £6.7bn for the business.
CD&R previously offered £5.5bn for the retailer, a deal that Morrisons’s shareholders said significantly undervalued the business.
This new deal represented a 60% premium to the supermarket’s share price as of June 2021 – before talks of a takeover begun to take place. The CD&R Offer values the entire issued and to be issued share capital of Morrisons at about £7bn on a fully diluted basis and implies an enterprise value of £9.7bn.
Commenting on the CD&R Offer, Andrew Higginson, chair of Morrisons, said: “The Morrisons board believes that the offer from CD&R represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders.
“CD&R have a strong record of developing, strengthening and growing the businesses that they invest in and they share our vision for Morrisons' future. This, together with the strong set of intentions that they have set out today, gives the Morrisons Board confidence that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business.”
The investment group said it recognised the legacy of founder Ken Morrison and would support the retailer in capitalising on those foundations to deliver both growth and profitability.
CD&R funds senior adviser Terry Leahy added: “CD&R is delighted to have the opportunity to support the management of Morrisons in executing their strategy to grow and develop the business. The grocery sector in the UK is undergoing great change and we believe Morrisons is well placed, with CD&R's support, to succeed in this environment.
“CD&R values Morrisons's distinctive business model and is committed to supporting it, including the successful ESG and broader stakeholder engagement strategies of the company that are essential to its continued success.”
Morrisons directors stated that they intended to recommend unanimously that shareholders vote in favour of the scheme at the court meeting and the resolution to be proposed at the general meeting. Each was to be convened as soon as was reasonably practicable following the date of the latest announcement from the supermarket chain, which expected these meetings to take place in early October.
Meanwhile, Valeo Foods Group – owner of Rowse Honey, Kettle crisps and Jacob's biscuits – has agreed to acquire meat snacks producer New World Foods Europe from Australia-based entrepreneur Tony Quinn.