The Takeover Panel, which governs merger and acquisition deals in the UK and arranged the auction, said CD&R had offered 287 pence a share, while a consortium led by the Softbank-owned Fortress Investment Group offered 286 pence.
CD&R’s victory marks a triumphant return to the UK grocery sector for Terry Leahy, the former chief executive of Britain’s biggest supermarket chain Tesco, who is a senior adviser to the firm.
The winning bid was only slightly higher than CD&R’s 285 pence a share offer that Morrisons’ board recommended in August.
The board, due to meet later on Saturday, is expected to recommend shareholders accept the new offer at a shareholder meeting slated for October 19.
Morrisons and CD&R had no immediate comment on the outcome of the auction.
Joshua A. Pack, managing partner of Fortress, said: “Morrisons is an outstanding business and we wish the company and all those involved with it the very best for the future.
"The UK remains a very attractive investment environment from many perspectives, and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value.”
If shareholders approve the offer, CD&R could complete its takeover of Morrisons by the end of the month, the second UK supermarket chain in a year to be acquired by private equity after a buyout of Leeds-based Asda completed in February.
Bradford-based Morrisons started out as an egg and butter merchant in 1899.
It listed its shares in 1967 and is Britain’s fourth-largest grocer after Tesco, Sainsbury’s and Asda.
The battle for Morrisons, which has been running since May, is the most high-profile of a raft of bids for British companies this year, reflecting private equity’s appetite for cash-generating UK assets.
CD&R has committed to retain Morrisons’ Bradford headquarters and its existing management team led by CEO David Potts,
It has also said it is committed to executing its existing strategy, not sell its freehold store estate and maintain staff pay rates. The commitments are not, however, legally binding.
Leahy was CEO of Tesco for 14 years to 2011 and will now be reunited with Morrisons CEO Potts and chairman Andrew Higginson, two of his closest lieutenants at Tesco.
Mr Potts, who joined Tesco as a 16-year-old shelf-stacker, will make more than £10m from selling his Morrisons shares to CD&R. Chief operating officer Trevor Strain will pocket about £4m.
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