Morrison (wm) Supermarkets Share Discussion Threads

[sutton erection] 21/6/2021 18:05

67,478,281 volume on LSE today.

139 million shares disclosed as short, maybe these have been closed elsewhere and will be reported tomorrow.

Hilariously Citadel Europe LLP have just disclosed they increased their short again last Friday.

Closed higher than offer with decent volume.

Many appear to expect this to go through.

I can't see the current bidder raising their price enough though.

Can't really compare with the ASDA TO as that was on offer.

[nerdlinger] 21/6/2021 17:36

67,478,281 volume on LSE today. 139 million shares disclosed as short, maybe these have been closed elsewhere and will be reported tomorrow. Hilariously Citadel Europe LLP have just disclosed they increased their short again last Friday.

Closed higher than offer with decent volume. Many appear to expect this to go through. I can't see the current bidder raising their price enough though. Can't really compare with the ASDA TO as that was on offer.

[chef2] 21/6/2021 17:28

It’s the form that has to be submitted if you are a major shareholder

[philanderer] 21/6/2021 17:20

"The takeover has many parallels with the recent acquisition of UK grocer Asda by forecourt operator EG Group," analysts at Berenberg noted. In October, EG Group and private equity backers TDR Capital agreed a deal to take control of the UK supermarket chain from US retailer Walmart.

"With press articles indicating that CD&R is still set to pursue the UK grocer, another offer is likely in our view," the German bank added.

Alliance News

[smurfy2001] 21/6/2021 16:49

What a cheeky offer.

Reminds me of the cheap offer on Sainsbury's/Asda merger. I thought that would go through but ended up losing a bit of juicy profit.

[benny shares] 21/6/2021 14:51

Just out of curiosity, what is form 8.3? tia

[ygor705] 21/6/2021 14:45

The most interesting aspect of all this is will what is happening trigger any kind of response from Amazon. Any kind of move from that direction is likely to push MRW much, much higher. Meanwhile the shorters are in trouble.

[1224saj] 21/6/2021 12:49

I bet Citadel are hurting this morning with their short from last week :-)

[chinese investor] 21/6/2021 12:48

The 1%ers now have to declare their holdings so expect a lot more RNSs.

[napoleon 14th] 21/6/2021 12:29

MRW (Breakingviews)
Although the all-cash offer represents a near-30% premium and the grocer’s shares haven’t reached that level in over two years, the Bradford-based group’s board reckons it “significantly undervalued” the company.
Morrisons has a point. CD&R’s offer values it at 10.5 billion pounds, once 3 billion pounds of net debt and leases worth 1.8 billion pounds are added to the purchase price. That’s around 12 times the supermarket group’s EBITDA of nearly 850 million pounds for the year to January.
There’s also limited scope for CD&R to crank debt up much further.

But analysts already expect Morrisons to boost sales by 3% a year over the next three years and lift its EBITDA margin above 6%. That implies the company could generate 1.25 billion pounds of EBITDA by January 2026. At the same 12 times multiple, Morrisons’ enterprise value would then be 15.5 billion pounds.

Now assume CD&R diverts 30% of the company’s operating cash flow to pay down debt over five years of ownership. Its equity investment would more than double to 12.7 billion pounds. In other words, CD&R could earn a respectable 17% internal rate of return on its investment without making many changes to Morrisons’ business, according to Breakingviews calculations.

The buyout firm’s plans are unclear, but if it could boost Morrisons’ EBITDA margins to 7.5% – the same as UK market leader Tesco is expected to earn in 2024 – it could afford to pay more than 300 pence per share and still book a 20% return. Another option is to pay off debt by selling real estate: Morrisons owns 85% of its properties. Buyout shoppers can afford to spend more on Morrisons.

[michaelsadfvn] 21/6/2021 12:22

It's moving up.

[nerdlinger] 21/6/2021 12:11

If this doesn't fizzle out I'll be disappointed, always nice to see a rising share price though and I like it when shorters suffer. Note that Potts holds some shares he held through the higher share price in 2018.

[goldpiguk] 21/6/2021 11:43

Hi,

As a long term holder of MRW shares I am pleased to see the real value of the company starting to be reflected, with todays share price reaction to a potential bid. The rapid growth of Aldi/Lidl in the UK has kept UK supermarket shares depressed for the last few years - and MRW shares in particular have languished.

Given the share price is currently above the initial offer price, the market is confident higher bids will now emerge. I agree.

A takeover by Amazon might well be the best outcome for customers and employees and with Amazon moving into the physical retail market in the UK, MRW would be a natural addition to its portfolio.

Below is a link to the companies Amazon has acquired.



As a customer I would much prefer to see MRW taken over by Amazon, rather than by a private equity firm.

Goldpig

[chinese investor] 21/6/2021 11:07

15.06% Silchester International Investors LLP
9.11% Columbia Management Investment Advisers, LLC
5.29% BlackRock, Inc.
5.09% Schroder Investment Management Limited
3.84% The Vanguard Group, Inc.
2.89% J O Hambro Capital Management Limited
2.7% Legal & General Investment Management Limited

[chinese investor] 21/6/2021 10:52

The bid is too low.
MRW has £6 billion worth of freehold property.
Add on one of the top four supermarket businesses in the UK and you can see why the bid has been rejected by the board.

[chinese investor] 21/6/2021 10:51

According to this morning's Daily Telegraph, there are two other US funds likely to make bids, plus the possibility that Amazon will also join in the fun.

[nhs buyer] 21/6/2021 10:41

Executives at Morrisons stand to receive multi-million pound payouts if a private equity takeover of the supermarket succeeds.

The grocer has rejected the £5.5billion bid because it was too low.

Under that offer, chief executive David Potts could have been handed nearly £18million for his stock in the company.

This includes 3 million shares he owns outright and another 4.6 million he could receive under various company schemes.

Operating chief Trevor Strain could have made £10million and finance boss Michael Gleeson £3million.

While Andy Higginson, chairman of Morrisons, could have bagged £291,000 for the shares he owns.

The four men all stand to receive even more if CD&R comes back with a higher offer.

Mr Potts, who was awarded a CBE in 2013, received £4.2million last year, including his £850,000 salary and a £1.7million bonus.

[tim 3] 21/6/2021 10:38

Feels wrong though.

Doubt it will benefit stores, staff, customers and even shareholders in the long run if they succeed.

[professor pettigrew 2] 21/6/2021 10:31

Analysts reckon M board will have to engage around 245p.

[professor pettigrew 2] 21/6/2021 10:31

Morrisons share price has jumped 53.85p, 30.65%, to 233.2p so far this morning - through the 230p proposal by private equity bidder CD&R meaning investors are confident there’s going to be a higher bid coming from somewhere.

[philanderer] 21/6/2021 10:30

Executives at Morrisons stand to receive multi-million pound payouts if a private equity takeover of the supermarket succeeds.

The grocer has rejected the £5.5billion bid because it was too low.

Under that offer, chief executive David Potts could have been handed nearly £18million for his stock in the company. This includes 3 million shares he owns outright and another 4.6 million he could receive under various company schemes.

Operating chief Trevor Strain could have made £10million and finance boss Michael Gleeson £3million. While Andy Higginson, chairman of Morrisons, could have bagged £291,000 for the shares he owns. The four men all stand to receive even more if CD&R comes back with a higher offer.

Mr Potts, who was awarded a CBE in 2013, received £4.2million last year, including his £850,000 salary and a £1.7million bonus.

[philanderer] 21/6/2021 10:20

Retail and M&A editor of The Times

Ashley Armstrong @AArmstrong_says
·

Morrisons share price has jumped 53.85p, 30.65%, to 233.2p so far this morning - through the 230p proposal by private equity bidder CD&R meaning investors are confident there’s going to be a higher bid coming from somewhere. Analysts reckon M board will have to engage around 245p

[philanderer] 21/6/2021 10:18

So, this morning’s share price surge suggests the City expects either a higher bid from Clayton, Dubilier & Rice, or another suiter, Mould concludes:

“This is not to say Morrisons is a slam-dunk. But you can see the value case for the shares and that must be the key attraction for CD&R. The issue now is how the big shareholders respond and whether they – and the Morrisons board – feel they can squeeze out a higher bid or feel sufficiently confident in Morrisons’ strategy and long-term competitive position to spurn the offer altogether.

“The shares traded at 235p early on Monday which is higher than that 230p proposal from CD&R. The market therefore seems confident that the suitor will have to raise its offer price or someone else might step into the game and we’ll see a bidding war.

“Amazon has long been touted as a potential buyer for Morrisons to help give it a much stronger foothold in the UK grocery markets so that’s an obvious name to watch.”