Morrisons accepts £6.3bn takeover bid from Majestic owner, but rival offer emerges

UK retailer Morrisons has accepted a multi-billion pound takeover bid from the owner of Majestic, Fortress Bank. However, a rival bid from a private equity bid has emerged this morning, sparking a potential bidding war.

News of the £6.3m bid by  a consortium bed by Fortress broke over the weekend, after the Morrisons board confirmed that it had accepted the £6.3bn offer and was recommending that shareholders vote in favour of the deal.

Others said to be in the consortium include the Canada Pension Plan Investment Board, and billionaire US industrialists, the Koch family, who were also part of the Majestic consortium.

However this morning, private equity group Apollo Group reported it was considering making a rival bid for the Bradford-based retailer, after it failed to buy Asda last year.

A statement from the group said that is was in the “preliminary stages” of  evaluating an offer for the retailer, although it said no approach had yet been made.

Following the news, shares in the supermarket rose by 11% and analysts are reported to have said that other investors may join in and create a bidding war.

Apollo’s takeover bid is the third received by Morrisons, which last month rejected a £5.5bn offer from Clayton, Dubilier & Rice (CD&R) as “far too low”.

The US-based Fortress Investment Group, which is owned by Japan’s SoftBank bought the commercial and retail business of Majestic Wine for £95 million in August 2019.

Speaking to the drinks business after the sale, the new executive chairman John Colley, who was managing director of the UK retailer between 2015 and 2017 under its previous owner, said the buyers were committed to the retailer’s “unique position and leading proposition” on the UK high street. He also noted that there was a “strategic opportunity” for Majestic to ensure that the range was “significantly different to those in the supermarkets”.