Time is running out for US private equity firm Clayton Dubilier and Rice (CD&R) to make another play for Morrisons (MRW.L)
CD&R has until Saturday (17 July) to make a second bid for Britain's fourth largest supermarket chain or walk away for good.
Morrisons turned down a £5.5bn ($7.65bn) takeover offer from CD&R at the end of last month and later accepted a £6.3bn bid from rival investment group Fortress. Reports suggested CD&R has been mulling another approach.
New York-headquartered CD&R previously banked £1bn from an investment in British discount chain B&M. Sir Terry Leahy, the former chief executive of Tesco, is a senior adviser.
American private equity firm Apollo Global Management has also expressed an interest in Morrisons and rival Lone Star is said to be interested.
Private equity firms have snapped up more British firms in the last 18 months than at any time since the financial crisis, according to data from Dealogic, with deals totalling more than £50bn during the period.
A swoop for Morrisons marks the second time this year that private equity has targeted a UK supermarket. TDR Capital and the billionaire Issa brothers completed a takeover of Asda from US parent Walmart (WMT) earlier this year.
If the Fortress deal goes through, the Morrisons sale would be the biggest private equity deal since Boots was bought for £11bn in 2007.
Watch: Labour calls on government to intervene in possible Morrisons takeover
Under the proposed terms, Morrisons shareholders will receive 254p a share, comprising 252p in cash and a 2p cash dividend.
Morrison currently has around 500 supermarkets in the UK and around 118,000 members of staff. UK ministers raised concerns about jobs and pensions. Fortress has promised to keep Morrisons' head office in Bradford and keep its existing management team.
Fortress, which also owns Majestic Wine, is owned by Japanese investment firm SoftBank (SFTBY). It has partnered up with Canada Pension Plan Investment Board and the billion US industrialist Koch family on the Morrisons bid.
Read more: Why Morrisons has become a takeover target
Morrisons is a key supplier and partner of online retail giant Amazon (AMZN) and supplies McColls convenience stores. It has been battling falling market share in recent years, which is now down to 10% from 10.6% five years ago. The supermarket made a profit of £200m last year, which was down 50% on 2019.
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