A US private equity group is poised to take control of the UK’s fourth-largest supermarket group.
Clayton, Dubilier & Rice (CD&R) has won an auction for the British supermarket Morrisons with a £7bn ($9.5bn) bid.
It marks a return to the UK grocery sector for Terry Leahy, the former chief executive of Tesco, who is a senior adviser to CD&R.
The takeover saga has dragged on since June amid fierce competition from two US-based investment groups.
CD&R’s victory was announced by the stock market’s Takeover Panel Today (Saturday). The private equity group offered 287p per Morrisons ordinary share, against a rival bid from Fortress, for 286p per share.
CD&R’s auction offer is slightly higher than the 285p-a-share offer that was recommended by Morrisons’ board in August. In July, Morrisons turned down an offer worth £5.5bn from CD&R, saying it significantly undervalued the business.
The board, which will meet on Saturday, is now expected to recommend shareholders accept the new offer at a meeting set for 19 October.
If the bid is approved by shareholders, CD&R will take over Morrisons by November.Morrisons was founded in Bradford in 1899 – where it still has its headquarters.
It opened its Grantham store in 1984.
The group has almost 500 shops and more than 110,000 staff.
The founder, William Morrison’s son, the late Sir Ken Morrison, ran the business for 50 years.
Previously, CD&R said it recognised Morrisons’ “history and culture, and considers that this strong heritage is core to Morrisons and its approach to grocery retailing”.
The private equity firm said it would help Morrisons to build on its strengths, including its close relationships with suppliers and its property portfolio.
Morrisons chairman, Andrew Higginson, and chief operating officer, Trevor Strain, previously worked with Sir Terry at Tesco.