Morrisons share price higher than value of offer by Fortress consortium

THERE is some doubt concerning the feasibility of a takeover as Morrisons share price higher than value of offer by Fortress consortium.

A statement from Morrisons’ largest shareholder Silchester International says “it is not inclined to support” the £6.3 (€6.93) billion private equity-backed takeover deal for the supermarket chain.

Although the Morrisons board has recommended the deal, it has to be approved by 75 per cent of shareholders and Silchester owns 15.14 per cent so is in a very strong position to try to influence the outcome of the bid.

The offer on the table is £2.52p (€2.79c) per share plus a small dividend but it appears that the market believes this to be less than the company is worth as for more than a week the share price has hovered around £2.66 (€2.93).

In addition, the takeover would see a reduction in debt of £3.2 (€3.52) billion.

Silchester International said there was “little in the recommended offer that could not be achieved by the supermarket as a listed company” and added “Silchester encourages Morrisons’ board to allow more time to respond to other parties who might offer better value to Morrisons’ public shareholders.”

There is still the possibility that Amazon may step in to make an offer before the shareholders vote on August 16 and with new members joining the Fortress consortium there is also the possibility that it may be forced to increase its offer before the vote.

Some experts argue that Morrisons has undervalued its properties and therefore if it undertook a review, shareholders would see the value of the company increase considerably rather than let the consortium benefit.

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