British supermarket chain Morrisons has rejected an unsolicited conditional non-binding proposal from US-based private equity firm Clayton, Dubilier and Rice (CD&R).

CD&R had offered to pay 230p (£2.30) a share in cash for the retailer’s entire issued and to be issued share capital.

Morrisons declined the offer after discussing it with its advisor, financial firm Rothschild and Co.

Last Friday, Morrisons’ share price closed at 178.45p (£1.79), valuing the company at £4.3bn ($5.9bn).

It was also confirmed that CD&R was considering a potential cash offer for the retailer’s issued and to be issued share capital.

Under UK takeover rules, the private equity firm had until 17 July to announce its intention to make an offer.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

In a statement, Morrisons said: “[Our] board evaluated the conditional proposal together with its financial advisor, Rothschild and Co, and unanimously concluded that the conditional proposal significantly undervalued [the retailer] and its future prospects.

“As a result, the board rejected the conditional proposal on 17 June.”

With more than 118,000 employees, Morrisons owns the freehold for 85% of its 497 stores and has 19 manufacturing sites, including bakeries, abattoirs, fishing fleets and egg farms.

Last year, the retailer’s annual profit reduced to £201m from £408m prior to the Covid-19 pandemic.

In its first-quarter trading update, Morrisons reported its total sales, including fuel, were up by 5.3% in the 14 weeks ending on 9 May.

The retailer said that its online sales during the first quarter saw year-on-year growth of 113%. It incurred a further £27m of ‘direct Covid-19 costs’.

This year, Morrisons plans to open two new stores in Kirkby and Chelmsford, and two temporary replacement stores in Camden and Little Clacton.

In March, the retailer extended its exclusive 10% discount for National Health Service (NHS) workers for the rest of the year.

The discount, introduced last April to support frontline workers amid the Covid-19 pandemic, has been effective since 1 April for shopping in-store.