Wednesday, October 27

Shareholder Vote in Heated Morrison Takeover Set for Oct. 19


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(Bloomberg) — Wm Morrison Supermarkets Plc set an Oct. 19 deadline for shareholders to vote on the hotly contested 7-billion-pound ($9.6 billion) takeover proposal by US private equity firm Clayton Dubilier & Rice LLC.

Britain’s fourth-largest grocer published documents on Saturday listing that date as the day shareholders will decide the outcome of what could be the country’s largest take-private deal in a decade. A vote of 75% or more is required for CD&R’s deal to go through .

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However, CD&R could still face a late challenge from a consortium led by Fortress Investment Group, which has been pursuing the grocer throughout the summer and hasn’t yet declared whether it’s walking away.

Morrison said in the document that as neither CD&R nor Fortress has declared its offer final, “a competitive situation” exists and as a result there will likely be an auction to resolve the matter. It’s expected the Takeover Panel, a body that oversees UK takeover transactions, will announce the terms of the auction process soon.

The fight for Morrison reflects the continued interest in Britain’s supermarkets following the 6.5-billion-pound buyout of Asda, the UK’s third-largest grocer, earlier this year. Private equity investors want to capitalize on the improving fortunes of leading chains after lockdowns triggered a surge of in-store and online grocery spending.

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CD&R is being advised on its bid by Terry Leahy, who previously ran Britain’s biggest supermarket chain, Tesco Plc. The private equity firm has made pledges to maintain Morrison’s policy on pay and pensions and support its long-term relationships with British farmers. It also promised not to carry out material sales and leasebacks of the grocer’s extensive real estate portfolio.

The offer from CD&R will be funded with more than 3.4 billion pounds of equity from funds managed by the private equity firm. Debt finance will be provided by Goldman Sachs, Bank of America, Mizuho and BNP Paribas.

The Fortress consortium includes America’s billionaire Koch family, the Canada Pension Plan Investment Board and Singapore sovereign wealth fund GIC.

Fortress declined to comment.

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