Morrisons suitor CD&R mulls counteroffer as bid deadline extended

CD&R previously had until 5pm today to submit a bid for Morrisons. But following Fortress’ £6.7bn offer on Friday, which shareholders will now vote on on August 27, Morrisons has confirmed that CD&R “must now by 5.00 pm on 20 August 2021 either announce a firm intention to make an offer for Morrisons under Rule 2.7 of the Code or announce that it does not intend to make an offer for Morrisons.”

Sources close to the situation told The Telegraph that prior to Fortress’ increased bid on Friday, which values the grocer at 272p a share including a special dividend, CD&R was readying a 265p a share approach.

Fortress’ increased offer means that CD&R senior advisor and former Tesco boss Sir Terry Leahy will have to go back to the drawing board to win approval for an increased offer.

It is understood that CD&R does have financing available for a higher bid, which could stand as high as 280p a share, but is considering whether a higher bid would yield sufficient financial returns.

Fortress’ increased bid on Friday followed a number of key Morrisons shareholders including Silchester and M&G advising that the consortium’s previous £6.3bn offer undervalued the supermarket chain.

Fortress’ latest offer has been recommended to shareholders by Morrisons’ board.