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Morrisons rejects private-equity firm acquisition approach of £ 5.5 billion

Morrisons rejected £ 5.5bn acquisition approach by private-equity firms advised by former Tesco boss Sir Terry Leahy

Food giant Morrisons has rejected a £ 5.5bn takeover approach by a US private-equity fund advised by former Tesco boss Sir Terry Leahy.

In response to speculation about the possibility of bidding by Clayton, Duville & Rice, the Morrisons board said last night that the proposal “significantly underestimates Morrisons and its future prospects.” Morrisons said last Monday that he first received a “one-sided, highly conditional, non-binding proposal” at 230p per share.

He said it comes with some prerequisites, such as completing detailed due diligence and arranging debt loans.

Refusal: The Morrisons Commission said the proposal “significantly underestimates Morrisons and its future prospects.”

The CD & R statement follows Sky News’ report that it has taken a preliminary approach to the supermarket group’s board of directors and has recently begun contacting banks to strengthen its financial support for the plan.

Morrisons, who evaluated financial adviser Rothschild and the proposal, said the board “unanimously” offered cash inadequately and personally rejected it on Thursday.

Morrisons is run by former Tesco executives Andrew Higginson and David Potts, now chairman and chief executive officer of a Bradford-based chain, both in close contact with Lehi during his tenure at Tesco. I was cooperating.

Leahy could be closely involved in closing the deal if CD & R pursued an interest in grocery stores. The dramatic sequence of events is the latest earthquake change in the supermarket sector after the lesser-known Ischa brothers bought Asda from Wal-Mart in a £ 6.8 billion raid last year. The deal was approved by the Competition & Markets Authority last week.

Private-equity giants and business tycoons are fascinated by the stable returns and huge assets that CD & R can sell to generate quick returns.

But the acquisition of Morrisons, one of the country’s largest private-sector employers with 110,000 staff, requires close public scrutiny.

CD & R said in a statement that it was uncertain whether a formal offer would be made. There are 28 days to formalize that approach. Alternatively, you can raise the offer price or leave in consideration of the refusal.

Morrisons shares have been flat so far this year, closing at £ 1.82 on Friday and valuing the deal at £ 4.3 billion.

Nonetheless, given the strong real estate asset base, it is certain that investors are likely to demand a significant premium to take over the business.

Morrison’s partner, Amazon, is permanently linked to possible bids. It has also been suggested that former Asda suitors Apollo Global Management and Lone Star could bid back in another supermarket after failing to acquire a Leeds-based group last year. I will.

Shares in other supermarkets, including Sainsbury’s, in which Czech Sphinx billionaire Daniel Kletinsky holds a 10% stake, could rise tomorrow in the news.

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Morrisons rejects private-equity firm acquisition approach of £ 5.5 billion

Source link Morrisons rejects private-equity firm acquisition approach of £ 5.5 billion

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