The bidding war for Morrisons has put the supermarket centre stage this summer.
Private equity group Clayton, Dubilier & Rice – which is advised by former Tesco boss Sir Terry Leahy – is in pole position after its £7billion offer trumped an earlier deal with Fortress worth £6.7billion.
But the City is awash with chatter that Fortress is preparing an improved bid of its own as it seeks to land a knock-out blow.
So the future of Morrisons will be very much in the spotlight when it reports its half-year results on Thursday.
Chief executive Dave Potts – who stands to make more than £20m from the takeover – will be keen to show just why private equity suitors are so keen to buy the supermarket chain.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, pointed to growth online and a successful wholesale business as well as the fact that Morrisons owns rather than rents most of its stores.
‘That’s led to concerns that a future buyer could sell off the assets and laden the group with debt,’ said Streeter.
The battle for Morrisons started in June when CD&R offered 230p per share, or £5.5billion. The bid was rejected by the Morrisons board.
Fortress then secured the board’s backing with a 254p a share offer worth £6.3billion in July. Fortress raised its own bid to 272p per share or £6.7billion following disquiet among some shareholders over the price. This was also backed by the Morrisons board.
But CD&R last month trumped that with an offer worth 285p a share, or £7billion.
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