Morrisons rebuffs £5.5bn takeover bid from private equity firm CD&R

The big-four supermarket operator turned down a cash offer of 230p per share, which valued the grocer at £5.5bn. 

Morrisons insisted the bid “significantly undervalued” the business. 

The Bradford-based chain said it received the “unsolicited highly conditional” approach from CD&R, which counts former Tesco boss Sir Terry Leahy as an advisor, on June 14. 

The bid was subject to “a number of pre-conditions including the completion of detailed due diligence and the arrangement of debt financing”, Morrisons said. 

Under the terms of the offer, Morrisons shareholders would still have received a final dividend of 5.11p per share, which it revealed back in March. 

The Morrisons board turned down the approach “unanimously” on June 17 after consulting financial advisor Rothschild. It insisted that the bid “significantly undervalued Morrisons and its future prospects”.

Morrisons’ statement came after CD&R admitted it was “considering a possible cash offer” for the grocer, after the private equity firm’s interest was reported by Sky News. 

CD&R previously invested in B&M and made more than £1bn from the retailer. 

Details of its bid for Morrions emerged just days after the acquisition of another big four grocer, Asda, was greenlit by the Competition and Markets Authority (CMA). 

Petrol forecourt tycoons the Issa brothers and TDR Capital have paid £6.8bn to buy Asda from US retail titan Walmart.   

There has long been speculation that Walmart’s great rival in the US, Amazon, could swoop on Morrisons. 

Amazon has a long standing relationship with Morrisons, selling the grocer’s products on its website.