Morrisons bidder plans convenience store empire

A leader in the anticipated Morrisons bidding war has revealed plans to create one of the country’s largest convenience store chains.

Buyout firm Clayton, Dubilier and Rice hopes to install the mini-Morrisons across the 900 petrol stations it owns through Motor Fuel Group.

The supermarket is already in the process of converting 300 McColl’s into Morrisons Daily stores.

However, some believe the move could be blocked or watered down by the competition watchdog.

READ MORE: Morrisons deal under fire as more shareholders speak out

Clayton, Dubilier & Rice saw its 230p-a-share offer for Morrisons overtaken by a 254p bid by a private equity consortium, led by rival firm Fortress, last month.  

It is readying an improved offer, which it must submit by August 9 under City takeover rules.

However, the potential buyers may be forced to sell off a number of petrol stations to go through with the purchase.

The Competition and Markets Authority (CMA) only cleared the Issa’s buyout of Asda after the billionaire brothers agreed to sell 27 petrol stations.

Fortress has also said it may sell off the Big 4 grocer’s 339 petrol stations, despite claiming the CMA had not opened an inquiry into its proposed takeover.

Although the consortium does not “anticipate” sale-and-leaseback transactions of Morrisons’ properties, analysts believe it cannot make an acceptable return without substantial asset sales.

The supermarket’s freeholds are thought to be massively undervalued and could be worth up to £9 billion.

Fortress is bracing itself for opposition at a shareholder vote on August 16, where it needs 75 per cent support for the deal to pass.

At least three investors have come out against the £6.5 billion buyout.

Silchester International, the supermarket’s biggest shareholder, said there was “little in the recommended offer that could not be achieved by Morrisons as a listed company”.

J O Hambro and another unnamed investor argue that Fortress should raise its offer by at least 16p-a-share.

The anticipated bidding war has fuelled a rapid rise in share price, which reached 271.5p when markets opened today.

Sources believe that multiple incremental bids could push this up to 290p.

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