The bidding war for Morrisons could spark a probe by watchdogs.
US private equity firm Clayton Dubilier & Rice (CD&R) is gearing up to table an improved offer this week.
CD&R has until Friday to make the bid or walk away after rival Fortress sweetened its offering to 272p per share ten days ago, valuing Morrisons at £6.7bn.
The bidding war for Morrisons could spark a probe by watchdogs
Analysts say the new bid will be at least 275p, with some even predicting 280p should CD&R want to try and bring an end to the bidding war, which began in June.
But competition concerns hang over the bid as the firm already owns Motor Fuel Group, the largest petrol station and convenience retailer in the UK.
CD&R – whose operating partner is former Tesco boss Sir Terry Leahy – bought Motor Fuel Group for £500m in 2015 and has 900 stations, even more than Shell, Euro Garages and BP.
Morrisons has 335 petrol stations, meaning CD&R would be in control of over 1200 stations.
CD&R’s operating partner is former Tesco boss Sir Terry Leahy
A source close to CD&R said: ‘There’s an assumption that this is something the Competition and Markets Authority [CMA] would have a look at, especially if there is a region that is too concentrated.’
Similar concerns were brought up when the Issa brothers bought Asda and the CMA forced them to sell 27 petrol stations.
Michael Hewson, chief analyst at CMC Markets, said: ‘I think this bidding war could run into problems seeing as CD&R does have stakes in other petrol station chains. I doubt the deal would be blocked, but then I didn’t expect them to block Sainsbury’s and Asda, and yet they did for very baffling reasons.’
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