Morrisons takeover battle won by CD&R – shareholder ratification expected in two weeks time

The UK’s fourth biggest supermarket group has recommended the £7bn bid (287p per share) to its shareholders.

The recommendation also marks a return to the UK grocery market for former Tesco chief executive Terry Leahy, who is a senior adviser to CD&R.

CD&R’s offer price trumped the slightly lower bid from another US investment company, Fortress, after an auction overseen by the stock market’s Takeover Panel.

Morrisons board has recommended Morrisons shareholders accept the CD&R offer at a meeting set for 19 October.

Morrisons was founded in Bradford in 1899 – where its headquarters remain.

The group has nearly 500 shops and more than 110,000 staff.

The son of founder William Morrison, the late Sir Ken Morrison, ran the business for 50 years.

Morrisons has recently reported the acceleration of the roll out of its convenience format, Morrisons Daily.

Before the takeover it said it plans to convert 350 stores to Morrisons Daily with its partner McColl’s.

CD&R has said that it recognises 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 both previously worked with Leahy at Tesco.

Higginson said the offer was “excellent value for shareholders while at the same time protecting the fundamental character of Morrisons”.

Morrisons is one of several of UK companies that have been targeted by overseas investors – and looks set to become the second UK supermarket chain in a year to be acquired by private equity, after Asda was taken over in February.