Morrisons receives £7bn takeover bid

Supermarket chain Morrisons’ board of directors have backed a new takeover bid of £7 billion by US private equity firm Clayton Dubilier & Rice (CD&R).

The new bid by CD&R is not the first expression of interest from potential new owners in recent times. The firm made a bid of £5.6bn in June that was rejected, followed by another from Fortress Investment Group for £6.7 billion that was backed by the Morrisons board. It then switched support to CD&R on the new offer.

Currently Fortress has urged Morrisons shareholders to take no action while it reconsiders its position, which could lead to a new bid. The Fortress bid largely promised to maintain the status quo with a minimum wage for staff at £10 an hour and many management positions remaining. CD&R has not been so forthcoming about what might happen, leading some to worry that there could be asset stripping and impacts on staff pay.

CD&R said however there would be no major changes to the management of Morrisons property portfolio.

Morrisons chairman Andrew Higginson said: “The Morrisons board believes that the offer from CD&R represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders.”