Morrisons agrees £6.3bn takeover bid from investment group

The supermarket says it has agreed to an offer by Fortress Investment Group

Morrisons has agreed to a takeover offer from the global investment manager Fortress Investment Group, which values the British supermarket group at £6.3bn.

The bid is backed by a unit of Koch Industries and Canadian pension fund CPPIB. Under the terms of the deal, Morrisons shareholders will receive 254p a share, comprising 252p in cash and a 2p cash dividend.

Andrew Higginson, Morrisons chairman, said: “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.”

He added: “It’s clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons.”

In June, the supermarket giant rejected a £5.5bn takeover proposal by the New York-based private equity firm Clayton, Dubilier & Rice (CD&R).

The chain said CD&R had “significantly undervalued” the grocer with its 230p-per-share enquiry.

The revelation sparked a surge in the grocer’s share price, rising by around a third on Monday, and drove speculation that other potential bidders could enter the fray.

UK supermarkets have been buoyed by the pandemic over the past year as sales were boosted by the closure of non-essential shops and hospitality firms.

Despite this, Morrisons was among grocers to post lower annual profits after being hit by high pandemic costs.

The takeover attempt sparked warnings from a group of Labour MPs that such a move could threaten the future of thousands of jobs and risk the potential for asset-stripping.

Morrisons was founded by William Morrison in 1899 as an egg and butter stall in Rawson Market in Bradford.

It steadily expanded and became a publicly listed business under the leadership of Ken Morrison in 1967, listing on the London Stock Exchange. The group has remained publicly owned since then.

The supermarket group has significant ownership of parts of its supply chain and a large property portfolio.