Fresh takeover offer suggests protracted bidding war for UK grocer Morrisons

Morrisons, the UK's fourth-largest grocer, is the subject of the most high-profile deal amid a raft of bids and counter bids playing out in Britain.

Shares in UK supermarket group Morrisons jumped above the level of an agreed takeover offer from US private equity group Clayton, Dubilier & Rice (CD&R), indicating a protracted bid battle for the retailer may yet have further to run.

The UK's fourth-largest grocer is the subject of the most high-profile deal amid a raft of bids and counter bids playing out in Britain.

The latest twist in the saga came late on Thursday when Morrisons said its board would unanimously recommend CD&R's £7bn (€8.2bn) offer and drop its previous recommendation for a £6.7bn bid from a consortium led by SoftBank-owned Fortress Investment Group.

The latest offer represents a 60% premium to Morrisons' share price before takeover interest emerged in mid-June.

Higher bid

However, shares in Morrisons were up 4.3% on hopes that Fortress will return with an even higher bid before shareholders vote on CD&R's offer at meetings expected in early October.

Having previously said it is "committed to becoming the new owner of Morrisons", Fortress has now said it is considering its options and urged shareholders to take no action, pending a further statement.

If Fortress remains keen, it is also possible the Takeover Panel, which governs deals in the UK, could instigate an auction process.

• Reuters