After a weekend shootout, the deal is done: CD&R is buying Morrison.
The winning 287p-a-share bid was only 1p higher than rival Fortress’s offer and represents a 61% premium to Morrison’s undisclosed share price.
Chunky Premium sparks frenzied interest in the British supermarket sector and reignites the question once again: Who’s next?
The fort is left with a lot of dry powder and Sainsbury’s next target in the knowledge of the city. Supermarket stocks jumped today in anticipation of a potential bid.
If Sainsbury’s had to go private, it would have left Tesco as the last publicly listed supermarket in the UK. Tesco’s market cap of around £20 billion means a bid is unlikely, but in the current environment, you can’t rule it out.
This week Ken Murphy will have that on his mind when he sets up his stall at Tesco.
The former Walgreens exec was an undisclosed quantity when he took over 12 months ago and has kept a low profile ever since. Half-year results this Wednesday will be Murphy’s coming-out party: The Irishman will for the first time detail his vision for the supermarket.
Reports suggest Tesco will announce a £1.5bn share buyback plan to keep investors sweet, but Citi will seek clarity on what Murphy plans to do inside the business as well.
Former Dave Lewis helped ship right after an accounting scandal — now investors want growth. It’s unclear where this comes from now that Tesco has taken off its rapidly expanding Asian businesses.
As well as private equity interest, Tesco faces competition from checkout-free Amazon stores and 10-minute grocery apps like Getir and Gorilla. All retailers are currently grappling with inflation, supply chain issues and staff battles.
Clearly, Murphy has a lot on his plate. No pressure, Ken.