Morrisons has agreed a takeover offer from a new US investment group led by the owner of Majestic Wines valuing the British supermarket group at £6.3billion.
Shareholders will receive 254 pence a share, comprising 252 pence in cash and a 2 pence cash dividend as a result of the deal by the trio of private investment groups led by Fortress.
The offer exceeds the £5.52billion proposal from US private equity firm Clayton,
Dubilier & Rice, which Morrisons rejected on June 19, saying it was far too low.
The deal was struck by Softbank-owned Fortress, Canadian pension fund CPPIB and a unit of Koch Industries, America’s largest private company.
Morrisons has agreed a takeover offer from a new company owned by funds managed or advised by affiliates of Fortress Investment Group
Koch Industries was started by Fred C. Koch who developed a cracking method to refine crude oil into gasoline.
His four sons, known as the Koch brothers, expanded its interests into chemicals, energy and finance and its total revenue in 2019 totaled £83billion.
The Koch family has been among the biggest donors to the US Republican party since the 1980s and has had a major influence on US politics.
Morrisons, which trails UK market leader Tesco, Sainsbury’s and Asda in annual sales, said the offer represents a premium of 42 per cent to its closing share price of 178 pence on June 18 – the last business day before CD&R’s proposal.
Shares in Morrisons closed on Friday at 243 pence, valuing the business at £5.8billion.
Fortress is a global investment manager with about £38billion in assets under management as of March.
Morrisons said an initial unsolicited proposal was received from Fortress on May 4 at 220 pence a share. This offer was not made public.
Fortress then made four subsequent proposals before its offer reached a total value of 254 a share on June 5.
Andrew Higginson, chairman of Morrisons, said: ‘The Morrisons directors believe that the offer represents a fair and recommendable price for shareholders which recognises Morrisons’ future prospects.
‘Morrisons is an outstanding business and our performance through the pandemic has further improved our standing and enabled us to enter the discussions with Fortress from a hard-won position of strength.
The deal was struck by Softbank-owned Fortress, Canadian pension fund CPPIB and a unit of Koch Industries, America’s largest private company. Pictured: David Koch, right, with older brother Charles, left, on Morning Joe in November 2015
‘We have looked very carefully at Fortress’ approach, their plans for the business and their overall suitability as an owner of a unique British food-maker and shopkeeper with over 110,000 colleagues and an important role in British food production and farming.
‘It’s clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons.
‘This, together with the very clear intentions they have set out today, has given the Morrisons directors confidence that Fortress will support and accelerate our plans to develop and strengthen Morrisons further.’
Since the 1980s, Koch brothers Charles and David have used their enormous fortune to bankroll their own conservative political machine, creating a vast empire of organisations and advocacy groups.
But they became a target for Democrats who criticised their influence on US politifcs.
Environmental activists have frequently admonished the pair for funding political campaigns that focused on rolling back environmental regulations and being the primary sponsors of climate change denial in the US.
They spent millions funding climate change-denying research, think tanks and politicians – which analysts believe was to expand their fossil fuel fortunes.
Koch Industries has paid millions in penalties and fines for oil spills, discharging toxic chemicals and violating other environmental regulations.
According to advocacy group Good Jobs First, the company has paid more than $749million in environmental violations since 2000.
The Koch brothers advocated for reduced government spending and limited involvement in wars overseas, and analysts believe they helped give rise to the Tea Party movement.
In a Weekly Standard interview in 2011, David Koch called then-President Barack Obama ‘the most radical president we’ve ever had as a nation’ and accused him of having ‘done more damage to the free enterprise system and long-term prosperity than any president we’ve ever had’, reported CNBC.
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