Singapore’s sovereign wealth fund GIC has joined the consortium led by Fortress Investment Group looking to acquire Morrisons, just as the supermarket’s largest shareholder has spoken out against the bid.
A deal to buy the UK’s fourth largest grocery chain for £6.3bn was agreed by the board on 3 July, but there has been continued jockeying for position within the consortium. Last week, private equity firm Apollo Global Management said that it was considering joining Softbank-backed Fortress, which has teamed up with Canada Pension Plan Investment Board and Koch Real Estate Investments.
But in a statement on Wednesday, Fortress said GIC would join the bid and provide £100m of the funding.
Despite Morrisons’ board backing the deal, the acquisition has been met with opposition both from shareholders and politicians.
Morrisons’ largest investor, Silchester International Investors, said it is ‘not inclined to support’ the existing offer, in a statement made yesterday. Silchester, which owns 15.14% of the supermarket chain, said there is little in the offer that could not be achieved by Morrisons as a listed company.
The group added that the short timetable of the scheme of arrangement, which requires 75% of shareholders to give their backing to become binding, gives insufficient opportunity for competing bids to emerge. It recommended the board give more time to respond to other parties who might offer better value to Morrisons’ shareholders.
Private equity interest in Morrisons kicked off with a failed £5.5bn takeover offer from another US-based buyout group, Clayton, Dubilier & Rice (CD&R), in June. Many considered the price undervalued the business, with one shareholder, JO Hambro Capital Management, suggesting a £6.5bn price tag would be closer to fair value. CD&R has not yet made another offer.
There has also been political opposition to the buyout with members of parliament questioning the benefits of the private equity model and speaking out against foreign acquisitions of critical British businesses.
Morrisons’ share price was flat today but is up nearly 47% year-to-date at 266p.
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“We thank investors for their support of MIP V,” says Karl Kuchel, CEO of Macquarie Infrastructure Partners. “We continue to access a range of high-quality investment opportunities across the region as we build the MIP V portfolio and will utilise the team’s sector and operational expertise to manage these investments over time.”
The MIP V capital raising builds on the strong investor support for Macquarie Asset Management’s infrastructure capabilities over a number of years. Macquarie Asset Management’s global infrastructure capital raising totalled more than USD38 billion in the last three years through 31 March 2021.
Source: Private Equity Wire
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