Morrisons shareholders have rubber-stamped the £7bn takeover of the grocer by Clayton, Dubilier & Rice (CD&R) nearly four months after private equity interest in the retailer first emerged.
At an extraordinary general meeting of Morrisons shareholders today, the bid from the New York-based private equity firm was waved through with more than 75% of required shareholders backing the proposed deal.
The grocer will now be delisted from the London Stock Exchange by October 28, bringing an end to 54 years as a listed business. The deal will now move to face the final hurdle of the Competition and Markets Authority.
Morrisons chair Andy Higginson said: “We thank shareholders for the strong support received at today’s meetings. We remain confident that CD&R will be a responsible, thoughtful and careful owner of Morrisons and we will now move forward with the remaining steps in the acquisition process.”
CD&R senior adviser Sir Terry Leahy said: “We are very pleased to have received the approval of shareholders and are excited at the opportunity that lies ahead. The particular heritage, culture and operating model of Morrisons are key features of the company and we will be very mindful of these during our tenure as owners.
“We very much look forward to working with the Morrisons team, not just to preserve the company’s many strengths but to build on these, with innovation, capital and new technology – helping the business realise its full potential and delivering for all of its stakeholders.”
The vote was held over two weeks after an auction took place to decide the outcome of a protracted battle between CD&R and a rival bid from a consortium led by fellow American private equity firm Fortress.
CD&R’s 287p-per-share offer prevailed and was subsequently recommended to shareholders by Morrisons’ board.
The bidding war had been running since mid-June when the Morrisons board said it had knocked back an unsolicited £5.5bn bid from CD&R.
After the auction, Higginson said the bid “represents excellent value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders”.
He added: “CD&R have good retail experience, a strong record of developing and growing the businesses in which they invest, and they share our vision and ambition for Morrisons.”
The move means former Tesco chief executive Leahy will return to UK grocery. He is a senior adviser for CD&R and has been personally involved in the bidding process.
The overall CD&R bid values Morrisons at £10bn, including around £3bn of debt. The private equity firm made numerous promises to safeguard the retailer’s freehold property portfolio and food production arm, as well as committing to following through with Morrisons’ recent pay award of at least £10 an hour for all colleagues in stores and manufacturing sites.
It also agreed to a deal with pensions trustees to provide additional security and support to the scheme, which has 53,600 members.
Fortress managing partner Joshua Pack said after the auction: “The UK remains a very attractive investment environment from many perspectives and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value.”
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