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).
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.
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.