Morrisons, one of UK’s largest supermarket chains has rejected a takeover bid from U.S private-equity firm Clayton, Dubilier. & Rice worth £5.5bn
The United Kingdom’s most popular grocery store, with 118,000 employees, said the offer “significantly undervalues” the company.
CD-R, in which the former Tesco chief executive Sir Terry Leahy has been an advisor, confirmed that it was exploring a formal bid.
Why The Rejection?
The American PE firm has done investment in the network of discount stores, B&M which made then more than £1bn.
Morrisons said in a statement it had “evaluated the conditional proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the conditional proposal significantly undervalued Morrisons and its future prospects”.
The quote of PE firm CD&R, at 230 pence per share is not an official and formal bid but as per UK takeover law, Morrisons should give a clear reply by the -7th of July whether it intends to accept or walk way from the offering.
Previous Takeovers
The move by the CD&R, one of the largest PE companies in the world, was one of the most high-profile offers compared to UK businesses last year.
The same private equity company this year has done an agreement on the acquisition of the UK’s medical group UDG, and a £308m bid for the plumbing group Wolseley.
In February, Zuber and Mohsin Issa and private equity firm TDR Capital purchased a majority stake in Asda from Walmart in a deal valuing the UK supermarket group at £6.8bn.
