* CD&R has until July 17 to make offer
* Morrisons has no immediate comment on CD&R statement
* 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
(Adds detail, Morrisons' no comment)
By James Davey
LONDON, June 19 (Reuters) - U.S. private equity firm
Clayton, Dubilier & Rice (CD&R) is considering a possible cash
offer for British supermarket group Morrisons, it said
on Saturday.
CD&R "notes the press speculation regarding a potential
transaction involving Morrisons and confirms that it is
considering a possible cash offer for the ... share capital of
Morrisons," it said in a statement.
It said there was no certainty an offer would be made.
Under British takeover rules CD&R has until July 17 to make a
formal bid.
CD&R's statement followed a Sky News report that it had made
a preliminary bid approach to the supermarket group's board that
could value Morrisons at 5.5 billion pounds ($7.6 billion).
A spokesperson for Morrisons had no immediate comment on
CD&R's statement.
Bradford, northern England-based Morrisons is Britain's
fourth-largest grocer by sales, trailing market leader Tesco
, Sainsbury's and Asda.
It is being advised by Rothschilds.
Shares in Morrisons, down 3% over the last year, closed on
Friday at 182 pence, valuing the group at 4.33 billion pounds.
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 target at 6.8 billion pounds.
POTENTIAL BID
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 persistent speculation that it could emerge
as a possible bidder.
Sky News reported CD&R has approached banks about financing
a potential bid for Morrisons in recent days. It said a bid
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 a staff of 118,000, 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.
(Reporting by James Davey
Editing by Mark Potter and David Holmes)
Tesco (TSCO)
Sainsbury's (SBRY)