Instead, bosses said they are in early discussions with rival PE firm Fortress to team up and become part of its consortium to buy the grocer.
Fortress is owned by Softbank and made a £6.3 billion offer for the business, which was accepted by the board, and is part of a consortium which also includes the Canada Pension Plan Investment Board and Koch Real Estate Investments, the vehicle of the US billionaire Charles Koch.
Shares in Morrisons dipped slightly on Tuesday morning on the news that the chances of a three-way bidding war are unlikely.
Apollo said the discussions “may result in funds managed or advised by Apollo forming part of the investment group led by Fortress for the purposes of the Fortress offer.
“As a consequence of these discussions, Apollo confirms that it does not intend to make an offer for Morrisons other than as part of the Fortress offer.”
It added: “Apollo notes Fortress’s intentions regarding the Morrisons business and all its stakeholders, as set out in the announcement of the Fortress offer… Should these discussions lead to any transaction, Apollo would be fully supportive of Fortress’s stated intentions regarding Morrisons.”
The takeover battle for the supermarket started last month when New York private equity firm Clayton, Dubilier & Rice (CD&R) made a proposed £5.5 billion bid, but this was rejected.
Politicians have raised concerns about the takeover and warned that any new owner could strip assets and reduce the rights of workers.
Morrisons owns the vast majority of its stores’ freeholds and has a large manufacturing supply chain.
But Fortress has stressed it intends to continue operating with the same management team, did not sell any of its freehold or long leasehold properties after it bought Majestic Wines in 2019, and “does not anticipate engaging in any material store sale and leaseback transactions” at Morrisons.
UK supermarkets have been buoyed by the pandemic over the past year as sales were boosted by the closure of non-essential shops and hospitality firms.
Nevertheless, Morrisons was among grocers to post lower annual profits after being hit by high pandemic costs.
The Bradford-based retailer was founded by William Morrison in 1899 as an egg and butter stall in Rawson Market.
Morrisons steadily expanded and became a publicly listed business under the leadership of Ken Morrison in 1967, listing on the London Stock Exchange.
It expanded further in 2004 with the £3.3 billion acquisition of rival Safeway, which helped to grow the northern-focused retailer further south.
The group has remained publicly owned since 1967, with the firm now largely owned by a raft of institutional shareholders, including Silchester International, Columbia, Blackrock and Schroders.
Morrisons has been led by chief executive David Potts since 2015, alongside chief operating officer, Trevor Strain, and chief finance officer, Michael Gleeson.
Mr Potts would be in line for a roughly £19 million payday were the 254p-per-share move completed and all his share interests paid out.
The company board have backed the offer by the Fortress-led consortium and said they believe it will “support and accelerate our plans to develop and strengthen Morrisons further” if the acquisition goes through.