Close this search box.

Multichannel strategy looks set to be a priority for Morrisons’ likely new owners

Morrisons expanded its online delivery services during the Covid-19 pandemic. Image courtesy of Morrisons

The likely new owners of Morrisons look set to build on its multichannel strengths. Clayton Dubilier & Rice (CD&R), which bid 287p per share for the supermarket at auction over the weekend, has previously said it expects to build on Morrisons’ in-store achievements while seeing it as well-positioned to benefit from the ongoing shift towards online grocery.

When CD&R first put its bid forward this summer it recognised Morrisons’ strength in multichannel retail.  “Morrisons has successfully built one of the leading online grocery businesses in the UK, leveraging its well-integrated business model and strong partnerships with technology businesses such as Ocado and Amazon,” it said. “CD&R believes Morrisons is well positioned to leverage the growth in online grocery using its differentiated platform.”

This weekend’s auction saw CD&R come ahead of Fortress Investment Group, whose highest bid was 286p per share. The winning bid implies that Morrisons is worth £9.8bn – more than nine times its underlying earnings for the year to January 31 2021. Morrisons’ online sales tripled in its last financial year, but pre-tax profits fell by 51% to £201m, compared to the previous year.

The result of the weekend’s auction is subject to shareholder approval, and could yet be set aside if a third party were to bid. The deal is set to be financed through a combination of equity capital and debt financing, and Morrisons will be taken private under the new ownership. 

Andrew Higginson, chair of Morrisons, says today: “Today’s final offer from CD&R represents excellent value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders.

“CD&R have good retail experience, a strong record of developing and growing the businesses in which they invest, and they share our vision and ambition for Morrisons. We remain confident that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business. Shareholders will now have the final say and, if the offer is approved, the board is confident that Morrisons will continue to go from strength to strength under CD&R’s ownership.”

Sir Terry Leahy, senior adviser to CD&R funds, and who is now thought likely to become the new chair of Morrisons, said: “We are gratified by the recommendation of the Morrisons board and look forward to the shareholder vote to approve the transaction. We continue to believe that Morrisons is an excellent business, with a strong management team, a clear strategy, and good prospects.”

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on