Morrisons takeover battle reaches £7bn at auction

The battle for control of supermarket chain Morrisons (LON: MRW) is all but over, after the weekend’s auction saw bidding edge a little higher.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

British bank notes and coins

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

It looks like the battle for control of UK supermarket chain Morrisons (LSE: MRW), which kicked off back in June, is finally over. Investment rivals Clayton, Dubilier & Rice (CD&R) and Fortress Investment Group (owned by Softbank) had been slugging it out.

As neither bidder had declared their offer final, the Takeover Panel took the competition to auction at the weekend. CD&R’s winning bid of 287p per share came in ahead of the 286p offered by Fortress.

Investors had been pushing the Morrisons share price further, edging it up as high as 297p even as late as Friday. They were clearly anticipating better offers from the combatants. But now it’s all done and dusted, the shares opened Monday at 286p for a drop of 3.7%.

60% premium

Investors who held the shares prior to the start of the bidding war have done very nicely. The final deal represents a premium of approximately 60% over the market price at the time. It values Morrisons at £7bn, after the company’s board had rejected a previous offer from CD&R valuing it at £5.5bn.

The takeover marks the return of a familiar name to the UK supermarket sector, that of Terry Leahy. Sir Terry was previously chief executive at Tesco, and is now a senior adviser at CD&R.

Morrisons shareholder approval

The bid still needs the nod from Morrisons shareholders, with the board expected to recommend acceptance at a meeting on 19 October. If it goes ahead as expected, CD&R should take control in November.

In other news, the Sainsbury share price ticked up a couple of percent in early Monday trading.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has recommended Morrisons. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

US Stock

The Nvidia share price falls! Here’s what I think happens next for the S&P 500

Jon Smith reviews the overnight results from Nvidia and explains why this could stall the S&P 500 performance through to…

Read more »

Investing Articles

Down 15% today, is this FTSE 100 share too cheap for me to miss?

JD Sports' share price has tanked after the FTSE 100 share released another profit warning. Is this the opportunity I've…

Read more »

Investing Articles

Up 8% today, is this FTSE 100 growth stock a slam-dunk buy for me?

Halma's share price is soaring thanks to another headline-grabbing trading update. Is the FTSE 100 stock now too good for…

Read more »

Investing Articles

With a P/E ratio of just 10.5 is now a brilliant time to buy a cut-price FTSE 250 tracker?

Harvey Jones says a recent dip in the FTSE 250 leaves the index trading at bargain levels. One stock in…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

To build a passive income flow, I’d follow this Warren Buffett approach

Warren Buffett has set up passive income streams most people can only dream about. Our writer sees some practical lessons…

Read more »

Growth Shares

As the boohoo share price falls, could it become a penny stock in 2025?

Jon Smith outlines some of the recent problems involving the boohoo share price and considers if things could get even…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Here are the worst-performing FTSE 100 shares over the last 5 years

These five FTSE 100 shares have been complete duds over the last half decade. But is there potential for a…

Read more »

Investing Articles

Nvidia stock has tripled this year! Can it keep rising?

Nvidia's latest sales update showed strong growth and the stock's been on a tear so far in 2024. So is…

Read more »