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Morrisons and Vectura bid battles heat up
Takeover regulators have extended the battle for Morrisons by a further two weeks, giving US private equity suitor Clayton, Dubilier & Rice more time to make a bid. CD&R have been given until 5pm on 20 August to either say what it wants to offer for the UK’s fourth largest supermarket chain, or to walk away.
CD&R had originally been turned down by the Morrisons board over a potential £5.5 billion bid in June, saying the proposed deal ‘significantly undervalued Morrisons and its future prospects.’ Since then the US private equity firm has been mulling whether it should up its offer for the supermarket chain.
The takeover took a twist last month when Morrisons’ board received a rival £6.3 billion offer from a consortium led by Softbank-backed private equity company Fortress. That deal was sweetened on 6 August when the Fortress consortium increased its offer to £6.7 billion in an attempt to put CD&R off from making another offer. That bid has been accepted and recommended by Morrisons.
In a similar vein, FTSE 250 medical device group Vectura was facing a rare takeover auction after being caught up in its own bid battle, with the company being fought over by Philip Morris International and Carlyle, the private equity investor.
The UK Takeover Panel handed the pair five working days to submit new offers in the hope of settling the saga that has dragged on since May. However on 11 August Carlyle dropped out of the running.
Several UK businesses have been targeted by overseas buyers this year, including aero-engineer Meggitt (MGGT) and fund administrator and asset services firm Sanne (SNN). Both acquisition agreements are subject to shareholder votes, while Meggitt’s takeover is also being closely watched by the UK Government over national security concerns.
WHY A DELIVEROO BID LOOKS UNLIKELY
News that its German rival Delivery Hero had taken a 5% stake in takeaways platform Deliveroo has helped light a fire under the share price and prompted bid speculation on 9 August. The shares are gradually clawing their way back to the 390p offer price after the company’s disastrous market debut back in March 2021.
However, any prospective offer would bump up against the fact the company’s founder Will Shu has a controlling vote for the next three years under its dual share structure. This would enable Shu to rebuff any deal.