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Summary
- UK’s supermarket giant Wm Morrison Supermarkets Plc agreed to an acquisition offer valued at £6.7 billion ($9.3 billion) from Fortress Investment Group.
- Morrisons and Bidco announced an increased cash offer value of 272 pence per Morrisons share (including increased cash consideration of 270 pence for each share and 2 pence special dividend)
- On 17 June 2021, Morrisons had rejected CD&R’s offer of 230 pence a share or total value of £5.52 billion
UK’s supermarket giant Wm Morrison Supermarkets Plc (LON: MRW) agreed to an acquisition offer valued at £6.7 billion ($9.3 billion) from Fortress Investment Group LLC. Stocks responded positively to the development and moved higher by over 2.5% on the last trading day of the week.
Earlier on 3 July 2021, Morrison Supermarkets entered into an agreement with Oppidum Bidco Limited for an all-cash offer for Morrisons’ share capital. Bidco is an indirectly owned by funds managed or advised by Fortress Investment Group’s affiliates. The Original Fortress Offer was announced after negotiations between the Morrisons Board and a consortium led by Softbank-owned Fortress Investment Group, amidst speculation about a counter-offer from Clayton, Dubilier & Rice (CD&R). However, CD&R’s offer to pay 230 pence a share valued at £5.52 billion was rejected by Morrisons on 17 June 2021.
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On 6 August 2021, Morrisons and Bidco announced that the two companies have agreed on the terms for an increased cash offer value of 272 pence per Morrisons share (including increased cash consideration of 270 pence for each share and 2 pence special dividend) for the entire share capital of the supermarket company. The Increased Fortress Offer includes all Morrisons’ issued and to be issued share capital at about £6.7 billion, an increase of approximately £0.4 billion over the Original Fortress Offer.
The revised offer value represents a premium of nearly 52 per cent to the per-share closing price of 178 pence on 18 June 2021 (last business day before the beginning of the offer period); 51 per cent to the volume-weighted average closing price of 180 pence per share for the quarter ended 18 June 2021; and 7 per cent to the Original Fortress Offer value of 254 pence per share. In addition, the shareholders will receive an additional special dividend of 2 pence per share, as per the terms set in the scheme document.
The Morrisons board believes that the Increased Fortress Offer is in the best interest of shareholders and recommends them to vote in favour of the resolutions needed to complete the offer at the Court Meeting and the General Meeting, slated to be conducted on 16 August 2021. As per the Original Fortress Offer released on 22 July 2021, each shareholder of Morrisons would receive 254 pence per share or a total of £6.3 billion ($8.8 billion), comprising 252 pence in cash from Bidco and 2 pence special dividend for each share.
