The Morrisons bidding war is set to be decided in a dramatic auction showdown ‘within weeks’, the Mail understands.
The Takeover Panel is expected to begin talks with the two bidders and the Morrisons board as soon as this week to draw a line under the three-month battle and end the ‘great uncertainty’ suffered by the business, its employers and suppliers.
The panel hopes to get a consensus between the board and the private equity bidders – Clayton, Dubilier & Rice (CD&R) and Fortress – over the format of the auction.
Summit: The Takeover Panel is expected to begin talks with the two bidders and the Morrisons board
The bidding war became public in June and the CD&R bid of 285p per share, posted at the end of last month, will now push the process into its fourth month.
A source said: ‘The panel will shortly be speaking to various parties ready for an auction in the middle of this month. Having such an extended offer period creates great uncertainty for the company.’
Fortress and CD&R could continue to bid in the run-up to the auction date, and the bid elected by the board could still go to a shareholder vote in early October.
This is the date set for investors to vote on the £7billion offer from front-runner CD&R, which has received the backing of the board.
The only way an auction will now be avoided is if Fortress, led by former Tesco boss Sir Terry Leahy, declines to come back with a higher bid, which would be likely to hand CD&R victory. An auction would probably give the two parties between one and five days to bid, with the highest offer recommended by the board at a shareholder vote.
The prospect of a higher bid means the business could overtake Sainsbury’s as Britain’s second largest supermarket by market capitalisation.
The Bradford-based grocer’s £7.02billion market capitalisation, at Friday’s close, was less than 1 per cent behind Sainsbury’s £7.08billion valuation, and the market expects the bidding for Morrisons to go higher still.
Three months ago, Morrisons was worth just £4.3billion and Sainsbury’s £6.3billion.
CD&R is expected to publish its scheme document this week, repeating pledges to protect jobs and the structure put in place by the Morrison founding family.
On Thursday Morrisons will announce interim results, with profits of around £240m.
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