U.S. investment giant Apollo plans to compete with Morrisons takeover bid Business News

U.S. investment giant Apollo Global Management has confirmed it plans to launch a competing bid to buy Morrisons, just hours after the Bradford-based supermarket chain said it accepted a £ 6.3bn offer. sterling from another New York private equity firm.

Apollo’s signal of a possible attempted diversion of Fortress Investment Group’s bid, which comes after months of secret talks, raised expectations of a multinational bidding war – pushing shares of British grocers up more than 11% Monday morning.

After hiring investment bank Morgan Stanley to advise it on a potential offer, after being beaten in a race to buy out Asda earlier this year, Apollo would become the third company to throw its hat in the ring on the takeover. by Morrisons.

Rival buyout firm Clayton, Dubilier & Rice (CD&R), also based in New York, is reportedly considering launching a new bid, after its £ 5.5bn offer was rejected last month. The Sunday Telegraph senior insiders reported that CD&R has “a lot more gasoline in the tank.”

But Fortress – which has owned Majestic Wine since 2019 – was still under pressure on Monday to fend off any potential suitor after pledging to preserve the legacy of the Morrisons founding family, according to Time.

The newspaper reports that Morrisons wrote to Business Secretary Kwasi Karteng and a number of local MPs assuring them that they and Fortress “place a very strong emphasis on the broader responsibilities of Morrisons property, including recognition of the legacy of Sir Ken Morrison ”.

After taking over the Bradford market stall set up by his father William Morrison in 1899, Ken Morrison opened his first supermarket in 1961, creating a chain that today employs over 110,000 people across the UK .

The Morrison family retains a five percent stake in the company, which calls itself “UK agriculture’s biggest customer” and works with more than 2,200 breeders and 200 producers.

As a result, Morrisons chief executive Andrew Higginson is said to have met with National Farmers Union president Minnette Batters this weekend in an effort to reassure members that the takeover will not impact their families. profits, while also seeking to convince Morrisons shareholders that the Fortress offer “represents a fair and commendable solution.” the price”.

In a move also seen as important in convincing investors to approve the takeover, Fortress reportedly pledged to support the supermarket’s existing strategy, maintain its head office in Bradford and preserve workers’ pension rights, also having said he was “fully in favor” of Morrisons’ decision to pay employees at least £ 10 an hour.

“We fully recognize the rich history of Morrisons and the very important role Morrisons plays for colleagues, customers, Morrisons pension plan members, local communities, supplier partners and farmers,” said Joshua Pack, Partner director of Fortress.

But shadow business minister Seema Malhotra warned Morrisons must ensure that “crucial commitments to protect the workforce and the pension plan are legally binding,” with workers’ union Unite also threatening not to not cooperate without “unbreakable guarantees” on jobs.

Darren Jones, Labor chairman of the business, energy and industrial strategy committee, said Time: “There have been too many examples in the past where private equity owners underinvested, collected payments and then left important UK retail brands in the administration, with workers, retired people and abandoned shopping streets. “

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This notice was published: 2021-07-05 10:29:00

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