Fortress is preparing a fresh bid for grocery giant Morrisons as its ongoing takeover tussle with rival Clayton, Dubilier & Rice heads towards an auction.
The private equity firm, which is leading a consortium in the race to acquire Morrisons, is strongly weighing up a fresh bid for the grocer, but is holding fire until the bid document from rival CD&R is published – likely later this week.
Fortress had previously been in the driving seat in the race for Morrisons with its £6.7bn bid, but was trumped by CD&R’s £7bn offer on August 20.
On the day the Morrisons board recommended CD&R’s rival bid, Fortress put out a note to the City that said it was considering its options and urged the grocer’s shareholders to “take no action”.
CD&R’s bid is expected to become effective in October, but the Takeover Panel is expected to begin talks with the two bidders and the Morrisons board as soon as this week in a bid to end the three-month battle for the grocer chain.
Fortress refuses to be rushed into taking any action after the Morrisons board agreed to extend the previous bid deadline by two weeks to allow for CD&R’s new bid to be tabled.
The private equity firm is also reportedly still in talks with fellow finance group Apollo about joining its consortium, which includes the billionaire Koch family and Singapore sovereign wealth fund GIC.
Should the bidding war go to auction, the Takeover Panel can either revert to the default bidding process – day bidding between the two parties over a five-day period – or an alternative auction procedure proposed by the target company and competing bidders, which has yet to be decided.
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