Morrison (wm) Supermarkets Share Discussion Threads

[philanderer] 15/7/2021 00:54

Morrisons bid is '£1.23bn too low'


Supermarket giant Morrisons is worth £7.6billion and the board should have held out for more cash, according to analysts.

It accepted a 252p a share offer from US buyout giant Fortress this month that valued it at £6.3billion.

But the Canaccord Genuity report puts a 314p-a-share, or £7.6billion, price tag on Morrisons – fuelling concerns that the board caved in too early.

With rival suitors circling - including private equity firm Clayton, Dubilier & Rice which had a 230p a share bid rejected last month – a higher offer could materialise.

Shares closed at 263.1p yesterday.

Graham Simpson, at Canaccord Genuity, said: 'The fact that the share price is above the 252p recommended offer tells us the market also expects a higher offer.

The uncomfortable question for Morrison management is 'Why did they accept 252p?'

The proposed takeover has sparked a political backlash and Business Secretary Kwasi Kwarteng meets Morrisons boss David Potts tomorrow to discuss it.

[nerdlinger] 12/7/2021 17:46

Good info at that link, pasted below. If CD&R's deadline was reset at the Fortress offer and Apollo was identified as an offeror 2 days later then Apollo might have 2 days more to make a counter-bid than CD&R and they could just wait for CD&R to put up or shut up before showing their own hand.

OFFEREE: Wm Morrison Supermarkets plc
Offer period commenced: 15:30 19-Jun-2021
10p ordinary ISIN: GB0006043169 NSI: 2,416,733,399
OFFEROR: Clayton, Dubilier & Rice, LLC as manager of Clayton, Dubilier & Rice Funds XI
Offeror identified: 15:30 19-Jun-2021
Rule 2.6 deadline: to be determined
Disclosure of dealings and positions in this offeror is not required
OFFEROR: Oppidum Bidco Limited (a newly formed company indirectly owned by funds managed or advised by affiliates of Fortress Investment Group, LLC)
Offeror identified: 07:06 03-Jul-2021
Rule 2.6 deadline: N/A
Disclosure of dealings and positions in this offeror is not required
OFFEROR: Apollo Global Management, Inc.
Offeror identified: 07:00 05-Jul-2021
Rule 2.6 deadline: to be determined
Disclosure of dealings and positions in this offeror is not required

[philanderer] 12/7/2021 17:15

Thanks call-logger.

[call-logger] 12/7/2021 17:03

Still to be decided according to the Takeover Panel Disclosure Table (it automatically got extended due to the new offer)

hxxps://www.thetakeoverpanel.org.uk/disclosure/disclosure-table

They've got till Day 53 according to the Code, as far as I can make out

[philanderer] 12/7/2021 13:57

Anyone have the august date that CD&R must state their intentions by now that the 17th july date has been extended ?

[tygwyg] 12/7/2021 13:41

Most articles/releases are copy/paste jobbies.Doesn't take much to seed disinformation and propagate a narrative.All part of the expectation management exercise.

[hades1] 12/7/2021 09:09

Unexpectedly strong open.

[tygwyg] 12/7/2021 08:05

Our 3xx shares are in demand.

[philanderer] 10/7/2021 20:58

Morrisons tries to soothe farmers’ fears over takeover

Morrisons boss David Potts has told farmers commitments by its US buyer “carry genuine weight”

Morrisons is under mounting pressure to extract legally binding commitments from the US consortium behind a £9.5bn takeover that it will not damage the legacy of the supermarket’s founding family.

[nerdlinger] 10/7/2021 13:29

Morries Chairman, CEO and CFO are former Tesco colleagues of Tony Hoggett. I wonder if they are mates.

[bountyhunter] 10/7/2021 11:09

Or buy Tesco instead given the size of Amazon.

From Phil's post above:

Amazon has appointed Tony Hoggett, a veteran of British supermarket chain Tesco, to run its physical stores, the U.S. group said on Friday.

Another one for the Tsco BB ;)

[chinese investor] 10/7/2021 10:55

Amazon can always make their move after Morrisons have gone private.

[philanderer] 10/7/2021 00:17

CD&R Weighs Fresh Pledges to Stay in $9 Billion Morrison Race


Clayton Dubilier & Rice is pushing ahead with its pursuit of British grocery chain Wm Morrison Supermarkets Plc, as it seeks to beat an agreed 6.3 billion-pound ($8.7 billion) bid from Fortress Investment Group, people with knowledge of the matter said.

Morrison has granted CD&R access to confidential information as it works on an improved offer, the people said, asking not to be identified because the information is private. In addition to a potential increase in its bid, the buyout firm is considering what additional commitments it can make to win over Morrison’s board, the people said.

CD&R has plenty of time to consider its options, as the deadline for it to submit a new offer isn’t until early August, the people said. The private equity firm is unlikely to rush into submitting a fresh bid, as there’s little advantage in showing its cards early. As CD&R seeks to trump Fortress, it also has to worry about a potential rival offer from Apollo Global Management Inc., which said July 5 it’s studying a bid.

Morrison Chief Executive Officer David Potts is planning to meet U.K. Business Secretary Kwasi Kwarteng on July 16 to discuss the potential takeover, according to the people.

Deliberations are ongoing, and there’s no certainty CD&R will proceed with a fresh bid, the people said. Representatives for CD&R and Morrison declined to comment.

A spokesperson for the U.K. government said overseas investors play a “major and positive role” in stimulating economic growth.

“We are committed to ensuring that the U.K. remains open for business, while protecting the livelihoods of British workers,” the representative said in an emailed statement. “In most cases, it is right that mergers are treated as a commercial matter for the parties involved.”

[philanderer] 10/7/2021 00:12

Fund manager JO Hambro sells out of Morrisons despite calling for higher bids

[loganair] 09/7/2021 21:52

The current leading bid from an outfit called Fortress is 252p a share, along with a clutch of warm, fuzzy but not legally enforceable agreements to keep things just as they are; no financial engineering here, honestly. The Morrison directors, perhaps believing they are also part of Fortress’s glittering future, have rather foolishly been seduced into recommending it. Lurking in the wings is Apollo, another private equity group, which may, or may not, bid more. Perhaps they will say they love the executives even more than Fortress does, and promise to behave even better in the fields.

Or perhaps they will bring the question back to earth, by simply bidding more, and propose to run the business to maximise profits.

That is all on top of the tax advantages of private equity. In an era of administered interest rates, debt is dirt cheap and can be offset against corporation tax on profits, unlike equity. To make matters worse, the executives at private equity businesses routinely have a “carried interest” which is a seven-figure payday thinly disguised as a capital gain, and which attracts tax at 28 per cent rather than the 45 per cent on income. Small wonder, then, that the Morrison executives can see the broad sunlit uplands – and not necessarily on the company farms.

[nerdlinger] 09/7/2021 17:16

Both bids so far have been announced over the weekend, Apollo and CD&R have been actively "market-making" via their bankers (see Form 8.5 announcements) this week so I imagine there will be a bid tomorrow. CD&R will probably wait for Apollo to go first. Yawn.

[wba1] 09/7/2021 08:33

philanderer; it is not ministers demanding, it is a shadow minister (who is simply doing what they do regardless of party - attack ministers)and, no doubt, backbenchers. It is surprising how little government spokesmen have said, suggesting approval would be forthcoming (although I assume there would be conditions and some hoops to go through for appearance sake). Things could change rapidly if another bidder emerged offering fewer assurances and with less enthusiasm from the board.

Difficult to put too many obstacles in the way when you have allowed bigger US takeovers in the past (Asda) and have been facilitating the growth of Aldi and Lidl via local councils.

[philanderer] 08/7/2021 23:51

Ministers demand probe into £6.3bn Morrisons takeover: Fears over US buyer and the impact on UK's food supply chain

[wba1] 08/7/2021 21:08

Look under the broker price forecasts at what they imply. The minimum forecast is 254, because the Fortress offer is binding. So a forecast of 254 simply means the broker does not expect a better offer (or at least does not expect a better offer which will not be rejected for reasons of commitments - or lack of them - or by politicians/regulators). A forecast of 262 just indicates an expectation of one further acceptable bid, as opposed to a bidding war. The forecasts are less to do with price and more about how the brokers see the positions of the possible bidders. I am inclined to see a takeout somewhere in the 260s. To go higher will require something akin to the scenario of Barbarians at the Gate (the book about the bidding war for Nabisco in the 80s (and in which KKR was a player). In that case the takeout price was dictated by PE machismo rather than financial calculation. It seems unlikely they could be that stupid again, but we can hope.

[philanderer] 08/7/2021 10:13

BERNSTEIN INITIATES WM MORRISON SUPERMARKETS WITH 'MARKET-PERFORM' - TARGET 262 PENCE

BARCLAYS RAISES WM MORRISON SUPERMARKETS TARGET TO 254 (190) PENCE - 'EQUAL WEIGHT'

[philanderer] 08/7/2021 00:53

Morrisons defends its private equity takeover amid calls for Parliament to scrutinise the £6.3bn deal


Morrisons last night sought to head off political opposition to a private equity takeover of the supermarket amid calls for Parliament to scrutinise the £6.3billion deal.

In a letter to government ministers and MPs in constituencies where it is a top employer, the grocer claimed that buyout firm Fortress and its backers would be ‘good stewards’ of the business.

It listed undertakings the consortium has given on pay, suppliers and properties, despite questions about how binding these will actually be and for how long.