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: British retailer Morrisons rebuffs $7.6 billion U.S. private-equity takeover bid

Shares of British retail group Morrisons shot up more than 30% on Monday, after the group said it had rejected a bid by U.S. private-equity firm Clayton, Dubilier & Rice that would value the company’s equity at £5.52 billion ($7.6 billion).

  • Morrisons
    MRW,
    +34.60%
    ,
    which along with its suitor was forced by U.K. regulations to confirm the bid after media leaks last week, said its board rejected a 230 pence-a-share “highly conditional non-binding proposal” on June 17.
  • Morrisons is the fourth-largest retailer in the U.K., with a 100,000 workforce.
  • The company’s stock price jumped to nearly 235 pence on Monday, indicating markets expect the U.S. private-equity firm to improve its offer, or another suitor to launch a bidding war.
  • Under U.K. takeover rules, Clayton, Dubilier & Rice now has until July 17 to put forward a firm offer.

Read: A Return to the Office Will Suit These Retail and Apparel Stocks

The outlook: Morrisons’ management team does not seem hostile in principle to a sale. But U.K. retailers’ prospects have been boosted by the COVID-19 pandemic. Morrisons also has a sizeable food-manufacturing business, and owns most of its stores. That leaves some margin for a deal sweetener.

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