Morrisons bidding war heats up as sale transitions to auction

The Takeover Panel announced that a five round auction will take place on Saturday 2 October between the two private equity firms, with a result announced next Monday – each round will allow the offerors to increase their bid for the business. However, if neither side increase their offers, the process will be scrapped

Both sides have agreed all bids will be at a fixed cash price and cannot include stakes in other businesses or dividends to shareholders.

“Additionally, in the fifth and final round of the auction procedure, it will be a requirement that any increased bid lodged by Fortress must be at an ‘even’ number of pence and any increased bid lodged by CD&R must be at an ‘odd’ number of pence,”​ said the Takeover Panel.

Bidding war

The bidding war for Morrisons began in June this year, with Fortress and CD&R going back and forth in their attempts to take over the retailer.

Last month, Morrisons’s pension scheme trustees intensified the bidding war by highlighting £800m needed to support employee pensions in addition to the terms of any current offer.

Commenting in the run up to the auction, Rollits corporate finance director Julian Wild said: “Whoever wins the bidding will still have to go to the shareholders for approval, but money talks and it now looks inevitable that the shareholders will vote to sell.

“I have no strong view, but I would probably put my money on the Clayton, Dubilier & Rice bidder. If they want it, I think they have the better credentials.”