UK’s fourth largest supermarket operator accepts offer from Fortress Investment Group

MorrisonsUKs fourth largest supermarket operator accepts offer from Fortress Investment Group
Morrisons has agreed a takeover offer from Fortress Investment Group, which values Britains fourth largest supermarket operator at £6.3bn.
The offer from Fortress, which is backed by Canada Pension Plan Investment Board and Koch Real Estate Investments, exceeds the £5.52bn proposal from US private equity firm Clayton, Dubilier & Rice (CD&R), which Morrisons rejected on 19 June, saying it was far too low.
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Under the terms of the deal, Morrisons shareholders will receive 254p a share, comprising 252p in cash and a 2p cash dividend.
Morrisons, which trails UK market leader Tesco, Sainsburys and Asda in annual sales, said the offer represents a premium of 42% to its closing share price of 178p on 18 June the last business day before CD&Rs proposal.
Shares in Morrisons closed on Friday at 243p, valuing the business at £5.8bn pounds.
Fortress is a global investment manager with about $53bn (£38bn) in assets under management as of March.
Morrisons said an initial unsolicited proposal was received from Fortress on 4 May at 220p a share. This offer was not made public.
Fortress then made four subsequent proposals before its offer reached a total value of 254p a share on 5 June.
Fortress has invested in grocery retail in North America and Europe, and has invested in Majestic Wine in the UK.
Andrew Higginson, the chair of Morrisons, said: The Morrisons directors believe that the offer represents a fair and recommendable price for shareholders which recognises Morrisons future prospects.
Morrisons is an outstanding business and our performance through the pandemic has further improved our standing and enabled us to enter the discussions with Fortress from a hard-won position of strength.
We have looked very carefully at Fortress approach, their plans for the business and their overall suitability as an owner of a unique British food-maker and shopkeeper with over 110,000 colleagues and an important role in British food production and farming.
Its clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons.
This, together with the very clear intentions they have set out today, has given the Morrisons directors confidence that Fortress will support and accelerate our plans to develop and strengthen Morrisons further.
Joshua Pack, managing partner of Fortress, said: We believe in making long-term investments focused on providing strong management teams with the necessary flexibility and support to execute their strategy in a sustainable and value-enhancing manner.
We fully recognise Morrisons rich history and the very important role Morrisons plays for colleagues, customers, members of the Morrisons pension schemes, local communities, partner suppliers and farmers.
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