Since mid-June, the Morrisons (LSE:MRW) share price has exploded by 60%. This growth is a result of a bidding war by private equity firms keen to acquire the company. After a prolonged battle between Clayton, Dubilier & Rice (CD&R) and Fortress Investment Group, the former emerged victorious with its winning bid of 287p per share.
The total acquisition price came out to be approximately £7bn. And just last week, Morrisons shareholders voted in favour of the offer. Sir Terry Leahy, the former Tesco CEO, is set to become the board’s new Chairman. After the shareholders agreed to the takeover bid, he said: “We are very pleased to have received the approval of shareholders and are excited at the opportunity that lies ahead.“
This deal now needs to be approved by the UK Courts. As such, there remains a possibility that the acquisition could still be blocked by regulators.
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What’s next for Morrisons?
Assuming the takeover does go through, it will bring to an end Morrisons’ 54-year run as a publicly traded company. In terms of operations, not much will actually change. CD&R has said that it intends to retain the entire freehold store portfolio. And the private equity firm has no plans to change the management team or the current growth strategy that the supermarket has.
However, it is worth noting that these promises are not legally binding. Therefore, Morrisons’ operational landscape may shift if CD&R changes its mind.
