Morrisons backs CD&R’s £7bn bid

Morrisons’ board has switched its recommendation on a £7bn bid from Clayton Dubilier & Rice. The private equity firm last night won the approval of the board with a 285p-a-share cash bid which values the supermarket chain at £9.7bn including debt. CD&R said it did not intend to engage in “any material store sale and leaseback transactions” and it expects to invest in new store openings as well as further online and wholesale opportunities. It added that it recognised that the 85% freehold ownership of Morrisons stores “is a particular strength of the business which has been carefully preserved over many years and will continue to be a cornerstone of Morrisons”. The bid document also highlights the potential for partnerships and acquisitions, particularly its fuel forecourts, where there is a potential to drive synergies with CD&R’s MFG forecourt business. The bid, orchestrated by former Tesco boss Sir Terry Leahy, will be funded by the US firm’s latest fund, along with Ares and West Street Strategic Solutions, with debt provided by Goldman Sachs, BNP Paribas, Bank of America and Mizuho Bank. Rival bidder Fortress has said it was “considering its options”. The Times (£) The FT (£) The Guardian The Telegraph (£) Photo © Morrisons