By Samuel Indyk
Investing.com – Shares in Morrisons (LON:MRW) surged on Monday after the company accepted a takeover offer from Fortress, in what could spark a bidding war for the UK supermarket chain.
A second private equity group, Apollo Global Management, confirmed to the London Stock Exchange that it is in the preliminary stages of evaluating a possible offer for Morrisons.
The news follows a rejected bid last month from a third private equity group, Clayton, Dubilier & Rice (CDR), whose £5.5 billion proposal was turned down immediately. Morrisons said it “significantly undervalued” the company and its future prospects.
Although the new Fortress bid trumps CDR’s initial proposal, reports suggested CDR has “plenty more petrol in the tank” to make a higher offer.
Amazon (NASDAQ:AMZN), who already has a partnership with Morrisons, was previously touted as a potential buyer although has been tight-lipped on any offer and there has been no suggestion a bid is forthcoming.
Nevertheless, Morrisons is in the eyes of private equity given it owns the freehold on a large number of properties and for its long-standing relationships with its suppliers. The company also owns some of its own food manufacturing sites.
Before the original CDR bid on 19th June, shares in Morrisons were trading at 178p before jumping over 30% to around 240p at Friday’s close.
The current accepted offer from Fortress is worth 252p per share, plus a 2p special dividend.
At 08:05BST, shares in Morrisons were trading higher by 11.5% at 267p per share.
Morrisons shares surge following takeover agreement, Apollo interest
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