James Davey

LONDON, (Reuters) – The Takeover Panel will oversee Saturday’s auction to decide the outcome of the six-month-long battle for British supermarket chain Morrisons. It cost $10 billion.

The shoot out will pit U.S. private equity group Clayton, Dubilier and Rice (CD&R), whose 285 pence a share bid was recommended by Morrisons’ board in August, against a consortium led by the Softbank (OTC:) owned Fortress Investment Group.

CD&R is being advised by Terry Leahy, who was CEO of Tesco (OTC:) for 14 years to 2011.

Morrisons, located in Bradford, England, was founded as an egg- and butter merchant back in 1899. After market leader Tesco and Sainsbury’s, it listed its shares and is Britain’s 4th-largest Grocer.

Morrisons’ battle is one of the most prominent among a number of British company bids this year. This speaks to private equity’s desire for UK cash-generating assets.

The Takeover Panel, which governs M&A deals in the UK, moved to an auction process because neither suitor has declared their offers final.

Maximum five rounds are allowed in the contest.

Either suitor can increase their offer in the first round. If neither does, CD&R’s existing agreed offer wins.

The other bidder can increase their offer in each round if they receive a better bid.

In the event that there’s still no winner, each of the offerors could increase their bids for the final round.

To prevent a draw any fifth round offer by Fortress must be at an “even” number of pence, while CD&R must bid at an “odd” number of pence.

After the auction is over, the panel will give a statement.

Morrisons will have until Tuesday to submit its recommendation. However, it may make a statement on Saturday after its board meets.

The board has already accepted offers from each party and it will recommend that shareholders accept the highest offer at the Oct. 19 shareholder meeting.

On Thursday, Morrisons stock closed at 295 pence. This indicates that investors are expecting a much higher offer.

Both CD&R and Fortress have committed to retain Morrisons’ Bradford headquarters and its existing management team led by CEO David Potts, execute its strategy, not sell its freehold store estate and to maintain staff pay rates. However, the commitments aren’t legally binding.

A victory for CD&R would reunite Leahy with Potts and Morrisons chairman Andrew Higginson, two of his closest lieutenants at Tesco.

Potts joined Tesco at 16 years old to be a shelf-stacker. He will now make over 10 million pounds selling shares in Morrisons to the winner.