Morrisons is expecting a counter bid from US private equity firm CD&R. The counter offer comes after one of Morrisons largest shareholders Silchester said it would not back the £3.6 billion offer from Fortress.
CD&R wants to rapidly roll-out Morrisons convenience stores across its Motor Fuel Group forecourt sites for which there are over 1,000 across the UK.
Mintel comment:
“As we wrote at the time of Fortress’ bid being provisionally accepted, this would not be the final word in a takeover deal. So here we have CD&R reportedly coming back into the fray. The Morrisons board need to not only maximise the best possible deal for shareholders but also find new owners in the best interest of the business moving forward.
That is why more details are now coming out from CD&R about the direction and investment it would look to put into Morrisons. The roll out of Morrisons convenience stores at Motor Fuel Group, also owned by CD&R, is a logical step and would build on the Morrisons Daily partnership with Rontec. However with that partnership standing at around 60 stores, the jump to a thousand would naturally give Morrisons a much larger position in the convenience sector.
Fortress too is also preparing itself in the event of a bidding war, bringing further investors into the fold to fight back. Key to the final deal will obviously be convincing key shareholders and with Silchester, which owns 15% of the business, already coming out against the Fortress deal it should not be underestimated how big a role Sir Terry Leahy’s role at CD&R will play in the final decision.”
