The battle between private equity firms to take over grocery giant Morrisons is set to intensify, with reports that Clayton, Dubilier & Rice (CD&R) is working on another bid.
CD&R is working on the financial package for a return bid with JP Morgan, financial advisers Goldman Sachs and BNP Paribas, according to The Times.
The New York-based private equity giant sparked what has become an increasingly heated battle for Morrisons after it emerged CD&R had failed in a £5.5bn bid for the grocer last month. The current frontrunner, American investment firm Fortress, had a £6.3bn offer accepted and recommended to the grocer’s board.
Fortress, which is owned by Japanese conglomerate Softbank, is leading a consortium to takeover Morrisons with the Canada Pension Plan Investment Board and Koch Real Estate, with debt being underwritten by HSBC and the Royal Bank of Canada.
The race for the UK’s fourth-largest grocer narrowed yesterday when private equity firm Apollo said it would look to join Fortress’ consortium. Apollo had previously thrown its hat into the ring and said it had been considering a standalone bid for Morrisons.
Fortress and Apollo combining forces would increase the consortium’s firepower should CD&R return with a bid and would also reduce the amount of equity being put up by each member.
The next step in the process is set to come before July 31 when Fortress posts its takeover documents to Morrisons’ shareholders.
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