Last checked at 
* Says 230p/share offer 'significantly undervalues' firm
* CD&R has until July 17 to announce firm intention to make
offer
* Former Tesco CEO Terry Leahy is CD&R senior adviser
* Former Tesco executives now run Morrisons
* Morrisons partner Amazon has been linked with bid in past
(Recasts with Morrisons statement)
By James Davey
LONDON, June 19 (Reuters) - British supermarket group
Morrisons has rejected a proposed 5.52 billion pound
($7.62 billion) cash offer from U.S. private equity firm
Clayton, Dubilier & Rice (CD&R), saying it is far too low.
Britain's fourth largest grocer by sales after Tesco
, Sainsbury's and Asda, said it received the
"unsolicited, highly conditional non-binding" proposal of 230
pence a share on Monday.
The board of Bradford, northern England-based Morrisons
rejected the proposal on Thursday.
"The board of Morrisons evaluated the conditional proposal
together with its financial adviser, Rothschild & Co, and
unanimously concluded that the conditional proposal
significantly undervalued Morrisons and its future prospects,"
the group said in a statement on Saturday.
Shares in Morrisons, down 5.5% over the last year, closed on
Friday at 182 pence, valuing the group at 4.33 billion pounds.
Morrisons said CD&R's proposal provided for Morrisons
shareholders to also still receive a final ordinary dividend of
5.11 pence per share announced on March 11.
CD&R had earlier on Saturday said it was considering a
possible cash offer for Morrisons.
Under British takeover rules CD&R has until July 17 to
announce a firm intention to make an offer.
APPETITE FOR SUPERMARKETS
CD&R's approach underlines private equity's growing appetite
for UK supermarket assets, attracted by their cash generation
and freehold assets.
In February, Zuber and Mohsin Issa and private equity firm
TDR Capital purchased a majority stake in Asda from Walmart
in a deal valuing the UK supermarket group at 6.8
billion pounds.
That deal followed Sainsbury's failure to take over Asda
after an agreed deal was blocked by Britain's competition
regulator in 2019.
Morrisons has a partnership agreement with Amazon
and there has been speculation it could emerge as a possible
bidder.
A formal bid from CD&R could involve Terry Leahy, the former
Tesco CEO who is a senior adviser to CD&R.
When at Tesco, Leahy was the boss of Andrew Higginson and
David Potts, who are now Morrisons' chairman and CEO
respectively.
Morrisons, unique among British supermarket groups in making
over half of the fresh food it sells, trades from about 500
stores and has 118,000 staff, making it one of the country's
biggest private sector employers.
In March, the group reported a halving of annual profit due
largely to costs incurred during the COVID-19 pandemic, but
forecast a bounce back in the 2021-22 year.
Earlier this month, Morrisons was rebuked by investors over
executive pay, with more than 70% of votes cast at its annual
shareholders' meeting rejecting its pay report.
($1 = 0.7242 pounds)
(Reporting by James Davey
Editing by David Holmes and Mark Potter)
