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Third major Morrisons shareholder opposes £9.5bn takeover offer

·2-min read
Morrisons
Morrisons

Another major Morrisons shareholder has spoken out against the £9.5bn takeover bid for the supermarket by US private equity firm Fortress, as doubts grow over the deal.

M&G, a top 20 investor, argued that the proposal, which includes £3.2bn of Morrisons' net debt, was too low just days after the supermarket chain's biggest investor Silchester opposed the deal.

Rupert Krefting, M&G's head of corporate finance and stewardship, said: "We do not believe that the takeover proposal for Morrisons led by Fortress reflect the true value of the company. The company has experienced a successful management turnaround over the past five years and has a strong balance sheet.

"Their proposals for the future of the company are possible while remaining in public ownership and can be made for the benefit of the supermarket’s current shareholders."

Mr Krefting's comment comes days after Silchester, which owns a 15.4pc stake, said the bid was “disadvantageous” for existing investors.

One executive at a rival supermarket said Morrisons was unlikely to get the deal over the line without Silchester’s backing. Fellow shareholder JO Hambro also expressed its opposition on Wednesday.

M&G's latest input continues an escalation of tensions between public and private equity investors.

Earlier this month Morrisons’ ninth-biggest shareholder, Legal & General Investment Management, urged its board not to allow a takeover “for the wrong reasons” after directors backed the bid. L&G did not say if it would back the Fortress deal.

The takeover must be supported by 75pc of shareholders in a meeting on August 16 if it is to go ahead. No investor has gone on the record in support.

Morrisons owns 87pc of the freeholds for its sites. It has been speculated that Fortress could seek to sell these off to raise cash, although the private equity firm has insisted it has no intention of making any major changes.

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