Morrisons £7bn takeover given green light by shareholders

The takeover for Bradford-based supermarket Morrisons has been given the greenlight by shareholders this afternoon at a meeting following Clayton, Dubilier & Rice's (CD&R) successful bid at an auction earlier this month.

The grocer confirmed that 99.2 per cent of the shareholder vote was in favour of the takeover.

Andrew Higginson, chairman of Morrisons, said: "We thank shareholders for the strong support received at today's meetings.

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"We remain confident that CD&R will be a responsible, thoughtful and careful owner of Morrisons and we will now move forward with the remaining steps in the acquisition process."

Morrisons has been at the centre of a takeover tussle for the past five months.

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Timeline of how the Morrisons takeover tussle unfolded before CD&R's £7bn bid

The US-based private equity giant made an offer of nearly £7bn beating out a rival bid from Softbank-owned Fortress Investment Group.

The stock market’s Takeover Panel, which governs merger and acquisition deals in the UK and arranged the auction, said that Fortress offered 286p per Morrisons ordinary share, while CD&R offered 287p.

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 takeover tussle culminated in an auction on October 2 with CD&R emerging the victor.

After the auction earlier this month, Andrew Higginson, chairman of Morrisons, said the final offer from CD&R represented "excellent value for shareholders” and protects the “fundamental character of Morrisons for all stakeholders”.

He added: “CD&R have good retail experience, a strong record of developing and growing the businesses in which they invest, and they share our vision and ambition for Morrisons.

“We remain confident that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business."

Mr Higginson added that the board was confident that Morrisons will "continue to go from strength to strength under CD&R’s ownership".

The successful bid and subsequent shareholder's vote means that Mr Higginson will be reunited with Sir Terry. He and CEO David Potts were two of Sir Terry's 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.

Sir Terry said: "We continue to believe that Morrisons is an excellent business, with a strong management team, a clear strategy, and good prospects."

Politicians and unions have sought assurances over jobs, pensions and employment conditions at Morrisons following CD&R's successful bid.

The Usdaw union said it was seeking discussions with the prospective new owners.

Joanne McGuinness, Usdaw national officer, said: “Our main concerns are about job security, while maintaining and improving our members’ terms and conditions of employment.

"We have heard the assurances already given and welcome the constructive working relationship that Usdaw has experienced so far.”

Shadow Minister for Business and Consumers Seema Malhotra said: “Morrisons is a much loved British firm which has been rooted in communities up and down the country for over 100 years.

"The new owners must urgently deliver binding assurances for workers, pension fund holders and local people.”

Bradford-based Morrisons started out as an egg and butter merchant in 1899. It was founded by William Morrison.

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.

There have been rumours that Tesco or Sainsbury’s could be next in line for a takeover bid.

Industry insiders believe Tesco is less attractive than Sainsbury’s because it lacks an extensive property portfolio, however it does have a superior online infrastructure compared to its big four competitors.

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James Mitchinson