Shares of Wm Morrison Supermarkets plc (MRW.L) were gaining around 32 percent in the morning trading in London after the company confirmed an unsolicited highly conditional non-binding cash offer of 230 pence per share from Clayton, Dubilier & Rice Funds XI or CD&R. However, the Board rejected the conditional proposal saying it significantly undervalues the firm.
Responding to the recent announcement by Clayton, Dubilier & Rice, LLC as manager of CD&R, the company noted that the Conditional Proposal was subject to the satisfaction or waiver by CD&R of a number of pre-conditions including the completion of detailed due diligence and the arrangement of debt financing.
The Conditional Proposal provided that Morrisons shareholders would also still receive the final ordinary dividend of 5.11 pence per Morrisons share announced on March 11, 2021.
Wm Morrison said its Board evaluated the Conditional Proposal together with its financial adviser, Rothschild & Co, and unanimously concluded that the proposal significantly undervalued Morrisons and its future prospects.
Meanwhile, CD&R, in its statement in response to press speculation regarding a potential transaction involving Morrisons, confirmed that it is considering a possible cash offer for the issued and to be issued share capital of Morrisons.
CD&R is required to announce a firm intention to make an offer for Morrisons or announces that it does not intend to make an offer by no later than July 17. The deadline can be extended.
CD&R said the announcement is not a firm intention to make an offer and accordingly there can be no certainty that an offer will be made.
In London, WM Morrison shares were 234.92 pence, up 31.7 percent.
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