(Alliance News) - Wm Morrison Supermarkets PLC on Friday said it has adjourned takeover meetings until August 27 as Clayton Dubilier & Rice asks for more time to evaluate its options, with the grocer in the midst of a bidding war.
Earlier on Friday, the Bradford-based supermarket chain agreed to an increased takeover offer from a consortium led by Softbank Group Corp-owned Fortress Investment Group LLC.
Under the offer, shareholders will receive 272.00 pence for each Morrisons share they own, valuing the supermarket chain at GBP6.7 billion. The offer comprises of a 270.00p cash payment from the consortium and a 2.0p special dividend.
The latest bid is a 7% premium to the previous Fortress offer of 254.00p, which included 252.00p in cash per share, plus the 2.0p dividend. This valued Morrisons at GBP6.3 billion.
The stock closed up 2.3% at 278.14p on Friday, valuing Morrisons at GBP6.73 billion.
Fortress is owned by Softbank Group and the bidding consortium also includes the Canada Pension Plan Investment Board and Koch Real Estate Investments.
The sweetened bid comes after The Times late last month reported that private equity firm CD&R was considering a new takeover offer for Morrisons.
The Fortress consortium on Friday noted "speculation regarding a possible counter-offer by CD&R".
Back in June, Morrisons rejected a GBP5.5 billion offer made from New York-based CD&R, which had sent the supermarket chain's share price soaring but which Morrisons ultimately said it was too low.
In addition, asset manager Apollo Global Management decided against making an offer for Morrisons. In July, Apollo said it was in the "preliminary stages of discussions" with Fortress, with a view of joining the consortium.
Later in July, GIC, one of the managers of Singapore's sovereign wealth funds, joined the bidding consortium led by Fortress.
This cooled the potential for a bidding war and ensured the Fortress-fronted consortium was the leader in the race to acquire Morrisons.
On Friday, Morrisons said CD&R has asked that it be provided with more time to "consider its options" in response to the increased Fortress offer.
Given the circumstances, Morrisons said it considered it to be in the best interests of shareholders to adjourn the court meeting and general meeting required to implement the Fortress offer, which was due to be held on August 16.
"The Morrisons directors continue to believe that the increased Fortress offer is in the best interests of Morrisons shareholders and are not withdrawing their recommendation of it," the company reiterated.
Under UK takeover rules, CD&R has until Monday next week to announce whether or not it plans to make an offer for Morrisons or walk away.
By Eric Cunha; ericcunha@alliancenews.com; update by Arvind Bhunjun; arvindbhunjun@alliancenews.com
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