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FT article is neutral. Times is reporting that a rival bid from Leahy guys is a dead cert, whereas Tekegraph suggests that now the most likely outcome is Fletcher group getting the deal. DYOR
i'm surprised to see £2.64 today... an opportunity to cash out or hold for a potentially another bid but if no bid will this dip to £2.54....
Apollo in talks to join Fortress-led Morrisons bid
PATRICIA NILSSON, ARASH MASSOUDI AND SARAH PROVAN
Apollo has pulled out of the bidding war for Wm Morrison and is instead negotiating whether to join a Fortress-led offer for the UK’s fourth-largest supermarket chain.
A group of three private investment groups led by SoftBank-owned Fortress agreed a £9.5bn deal to acquire the grocer this month. Their successful bid came just two weeks after an unsolicited approach from US private equity firm Clayton, Dubilier & Rice.
Apollo had said it was also looking at Morrisons, sparking the possibility of a three-way bidding war.
But yesterday Apollo said it was no longer considering its own offer, stating that it was in “preliminary stages of discussions with Fortress” and “may” join the investment consortium.
“Apollo confirms that it does not intend to make an offer for Morrisons other than as part of the Fortress offer,” the private equity group said.
The Fortress-led group already includes backing from the Canadian pension fund CPPIB and a real-estate-focused investing arm of US conglomerate Koch Industries.
Its bid of 252p plus a special dividend of 2p values the equity of Morrisons at £6.3bn before the inclusion of £3.2bn of net debt.
The Fortress-led consortium is moving quickly to close the deal, according to two insiders. Morrisons aims to release a circular to shareholders before the month ends, after which a shareholder vote will be held in mid-August
Those plans could be disrupted if CD&R returns with a fresh offer. It has until the shareholder vote to improve its rejected bid, which valued Morrisons at £8.7bn including debt.
Shares in Morrisons fell slightly to 261p by yesterday’s close, but continue to trade above the Fortress-led group’s bid, a sign that investors believe the bidding war will continue.
If it decides to add Apollo to its investor group, Fortress would potentially have further firepower to fund its efforts.
Apollo has shown an interest in supermarkets before. In 2016, it struck a $1.36bn deal for US grocery chain Fresh Market and in recent days has filed paperwork to return the business to the US public market. It also made a failed tilt at UK chain Asda last year.
I had originally thought that CDR had timed themselves out but another poster corrected me by stating the time limit had been extended due to a rival offer being made.
Its obviously going to be good for shareholders if a bidding war takes place but I hope at the end it is the Fortress group that succeeds due to a track record of running companies as they are and not assets stripping them.
Back in the race? Just not confirmed or at what price, which is probably why the SP is still where it is and not back to 254.
It seems fairly obvious to me that Jeff Bezos is going to announce a knockout Amazon bid for Morrisons live from space very soon. DYOR; although I appreciate that it might be tricky reaching him at the moment.
Hi Betram - Thanks, but a wager is a wager. But good job I didn't risk more on this! And your 10 quid isn't safe yet!
Hi gmed-2
Don`t worry I will let you off your quid if amazon don`t come in ..... hehe.
So why would fortress let Apolloo joint the club to offer more money and lose a big share of Morrisons when Fortress has already gained the yes agreed bid by Morrisons bod's.
Now i can understand that happening if another higher offer comes in higher than the agreed offer but now before.
CDR have got until next month to bid. The timetable was reset by Fortress’ offer
I've always believed that Amazon would be the last to come to this party. I think they will wait until the dust settles and they know exactly who is and who isn't in this and at what price(s). They will then come with a "knockout offer" and be the ultimate winner. This is all pure conjecture, of course, but if I were in Amazon's position, that's exactly what I'd be doing. (This may explain why I'm not on Amazon's board.) And as I see it, There is now even more urgency behind Amazon making an offer for Morrisons because, as jedclampit speculates, if Apollo joins Fortress, they may be plotting some sort of splitup of Morrisons. This would be very bad news indeed for Amazon, which would then see the reliability of one of its maior suppliers potentially threatened. I just cannot believe they will allow this to happen. (On the other hand, I also could not believe that personal computers would ever be a success either, so take all of this for what it's worth haha)
CDR are too late now. They had until 17th July to declare whether they were still in or out.
Feels a bit too 'comfortable' for this to go through at 254p (Fortress offer), I wonder if CD+R will come back with a counter-bid: Just because their initial bid was rejected doesn't mean that was their final offer and they may be encouraged by Apollo stepping aside.
Jed,
The SP will not fall to 250p ish . Fortress / Apollo will end up making an offer around 265p because they need shareholders to approve the takeover. Why would Shareholders accept a bid of 252 +2p when they could sell right now for around 262p.
Bidding 265p will not be an issue for a combined investment group.
Its actually a very clever strategy by Apollo as they will gain a foothold in Morrisons with a lower financial commitment and also avoid getting into a bidding war.
Media companies bidding for Football rights should take note.
So Apollo has now pulled out and wants to join the current takeover offer, why should the curret bidders even consider Apollo joining them, No chance.
Apollo must think there is still value in Morrisons at the offer price and if they were granted a part of any offer they must want to split up the company, and why would the current bidders let them and take a part of the profits when their offer has already been accepted.. Think the sp will fall to £2.50 ish offer price.
Why sub 250 when there's an accepted offer conditional on shareholders vote, of 254?
Jimbo, I think sp will fall by around 5- 10p on open as investors consider that the take out price will now be lower than hoped, It might then recover over following days as others emerge. We shall see.
Its quite hard to work out what will happen to the SP on opening. My best Guess is that with the added funds available between the two groups and the fact the SP is currently higher than Fortresses offer of 254p a slightly higher offer will be made around 265p to appease shareholders and make up for the inevitable change in commitments that Fortress have already made. It is also possible that another investment group will enter into the bidding for MRW. Overall I don't think the SP will move much on opening but may go down slightly later on in the day if shareholders decide that a price of around 265p is the best that will be achieved and sell up.
Apollo in league with Fortress, narrows the options, it’s a done deal IMO.
Well all is quiet.. maybe they are still running the numbers,
Myself hoping for a final 275 bid . As to also bear in mind when the pound gains strength against the dollar they will win again when they reflowt this back on the market or reap the dividends that will also be worth more due to the strength of the pound .
Would not like to be out of this over weekend.
Thanks NotBot.
Sorry I couldn't help directly going back to the Safeway days.
Morrison's own table of dividend history goes back a bit further than my own list, but only to FY2006/2007.
If anyone needs to see it, to save searching it should be here:-
https://www.morrisons-corporate.com/investor-centre/shareholder-information/dividend-history/
I'll continue watching the MRW situation with interest but probably from the sidelines. Unfortunately it could go on for several more weeks before the direction of travel becomes clear.
All the best,
Mike.
Great, thanks @MikeM14. I've been in and out (mostly in) of MRW since pre- Morrisons buying Safeway so I'll have had most of those and more - I don't think my shares quite count as 'free' yet, but they've certainly paid well while I've had them. As for me, I'm holding out for a higher offer, I don't believe it'll go for the current low-ball bid when there are multiple bidders in play.
CORRECTION:-
The first line in my list in my previous post should read:-
20 Jun 2012 - Final - 7.53p;
Mike.
Hi NotBot,
I've researched dividends further in relation to my own holding. Your figures are, as you suggested, just the Ordinary dividends and don't include any "Specials".
During the time of my own shareholding (bought in 3 tranches, on different dates), what I actually received was as follows in terms of amount per share:-
20 Jun 2021 - Final - 7.53p;
5 Nov 2012 - Half-Year - 3.49p;
19 Jun 2013 - Final - 8.31p;
11 Nov 2013 - Half-Year - 3.84p;
11 Jun 2014 - Final - 9.16p;
10 Nov 2014 - Half-Year - 4.03p;
10 Jun 2015 - Final - 9.62p;
9 Nov 2015 - Half-Year - 1.50p;
15 Jun 2016 - Final - 3.50p;
7 Nov 2016 - Half-Year - 1.58p;
29 Jun 2017 - Final - 3.85p;
6 Nov 2017 - Half-Year - 1.66p;
28 Jun 2018 - Final incl 4p Special - 8.43p;
5 Nov 2018 - Half-Year incl 2p Special - 3.85p;
1 Jul 2019 - Final incl 4p Special - 8.75p;
1 Nov 2019 - Half-Year incl 2p Special - 3.93p;
29 Jun 2020 - Final - 4.84p;
30 Oct 2020 - Half-Year - 2.04p;
25 Jan 2021 - Special - 4.00p;
28 Jun 2021 - Final - 5.11p.
To save space I haven't broken-out the Specials into separate lines where they were paid on the same date as an Interim or a Final, but this information is all given clearly also on the Morrison website under "Dividend History". In my case, the total dividends during my first tranche holding work out to 99.02p. Looked at another way, that reduces my average purchase price per share from just over 272p to just over 187p per share (bearing in mind later tranches were held for less time). Of course everyone's situation will be different depending on when they bought, in how many tranches, etc etc.
Everything here ignores the "Tax Credits" regime that was in place before April 2016, and is gross of any income/dividend tax where, again, everyone's individual situation is likely to be different.
I hope this is of some help to some on here - it was certainly an eye-opener to me!
It made me feel less bad about selling at what was, in CGT terms, a slight loss yesterday (just over 264p as against an average acquisition cost per share of just over 272p).
Good luck all with whatever you decide to do (whether or not I decide to re-enter at a lower price!).
Mike.