New potential bidder enters fray for Morrisons

In the wake of Saturday’s news that Morrisons has agreed a £9.5bn takeover deal, Apollo Global Management Inc has confirmed this morning it is in the preliminary stages of evaluating a possible offer for the Bradford-based supermarket.

The firm noted that no approach had been made to the Morrisons board and there was no certainty that any offer would be made.

This isn’t the first time Apollo has sought to take control of a Yorkshire-headquartered supermarket. Last year prior to the acquisition of Asda by the Issa brothers, it was reported that Apollo were working with the former chief executive of Debenhams, Rob Templeman on a £6.5bn bid for the then Wallmart owned supermarket.

The agreement announced on Saturday between Morrisons and the trio of investors brought to an end two months of negotiations, after the investment group made an initial bid of 220p which was not made public. The successful 254p-per-share offer is made up of comprising 252p in cash and a 2p cash dividend.

However following the news the stock market opened this morning with Morrisons shares valued at 267.20 pence per share, surpassing the figure the supermarket’s board had agreed with the trio of investors – Fortress, CPPIB, and Koch Real Estate Investments.

This is the latest chapter in the Morrison’s tale and follows the UK’s fourth largest supermarket rejected a buyout offer from US private equity firm Clayton, Dubilier & Rice (CD&R) last month , after it “significantly undervalued the business”.

The supermarket made further headlines in June when it suffered one of the biggest shareholder revolts on record over plans to pay bonuses to bosses.

The interest in Morrisons is testament to the successful turnaround of the business by Andrew Higginson Morrisons chairman and chief executive David Potts, who took over the supermarket chain in 2015. At the time the business was widely seen to have lost its way and was losing ground to the discount retailers of Aldi and Lidl while failing to make any impact on the middle ground.

However under the stewardship of Higginson and Potts and CFO Trevor Strain, the firm has been transformed with Potts predicting in a trading update in May two strong years of growth.

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