US private equity firm considers bid for Morrisons

Reuters

US private equity firm Clayton, Dubilier & Rice is considering making a cash offer to acquire Morrisons, the UK's fourth-largest supermarket group.

It has 28 days to make a formal bid for the company or withdraw.

The company said it "notes the press speculation regarding a potential transaction" and it confirmed it was considering a possible offer.

It has previously made investments in the discount shop chain B&M, from which it made more than £1bn.

Last month, Morrisons said sales had had increased by 2.7% in the 14 weeks to 9 May, saying the pandemic had led to a "renaissance of the supermarket" as Brits enjoy cooking at home more.

• Morrisons hails 'renaissance of the supermarket'
• People return to supermarkets as online sales slow

But it added that in the previous three months alone it had faced a £27m bill for Covid-related costs.

This is one of the most high profile of many bids for UK companies over the past year.

The flurry of takeover activity is being fuelled by the relatively low share prices of businesses here compared to abroad and cheap money because of low interest rates.

American company CD&R is one of the biggest takeover firms in the world and when it comes to UK retail it has form.

It has previously made investments in the discount chain of shops B&M, from which it made more than £1bn - and the petrol station operator MFG.

Morrisons - with its £1bn property portfolio, most of which it owns - and its 10% of the grocery market - is an attractive proposition.

Not least because one of CD&R's senior advisors is the former Tesco boss Sir Terry Leahy who used to work with the current Morrisons management - Dave Potts and Andy Higginson.

No price tag has yet been put on the business - that'll come in the coming weeks if the offer is made official.

There has been speculation about bids for Morrisons in the past from Amazon, which sells the supermarkets products on its site.

Perhaps this news might flush more bids for the company out of the woodwork.

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June 20, 2021 at 05:03AM

https://www.bbc.co.uk/news/uk-57541617