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Morrisons investors set to rubber stamp $10 billion CD&R takeover By Reuters

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© Reuters. FILE PHOTO A flag is seen flying outside Morrisons’ supermarket in New Brighton (Britain), July 5, 2021. REUTERS/Phil Noble/File photo

LONDON (Reuters) – Shareholders in supermarket group Morrisons are expected on Tuesday to approve a 7 billion pound ($9.6 billion) offer by U.S. private equity firm Clayton, Dubilier & Rice (CD&R), bringing the curtain down on Britain’s most fiercely contested takeover this year.

CD&R, which has former Tesco (OTC:) boss Terry Leahy as a senior adviser, won an auction for Morrisons on Oct. 2, bidding a penny a share more than a consortium led by Softbank (OTC:) owned Fortress Investment Group.

The deal, which was approved by investors after a lengthy six month battle to acquire Morrisons (Britain’s fourth largest grocer and the nation’s top food producer), will be completed.

It will end Morrisons’ 54-year run as a publicly listed company and see the ultimate decisions on the group’s future shift from its Bradford, northern England, base to the New York home of CD&R.

Morrisons began as an egg and butter dealer in 1899. They now trail market leaders Tesco and Sainsbury’s in terms of annual revenue.

As private equity is looking for UK cash-generating assets, the battle for Morrisons was one of the most prominent among a number of British company bids this year.

Analysts are not expecting any dissent, as the winning offer represents 61% of Morrisons share price prior to takeover interest publically emerged in mid June.

To go through CD&R’s offer needs the support of shareholders representing at least 75% in value of voting investors at the meeting, which is being held both physically and virtually.

CD&R has committed to retaining Morrisons’ Bradford headquarters and its existing management team, led by CEO David Potts.

The company also stated that it would continue to execute its existing strategy for the supermarket chain, including not selling its freehold stores and maintaining staff salaries.

These obligations aren’t legally binding.

If, as expected, shareholders approve the offer, CD&R could complete its takeover by the end of the month, making Morrisons the second UK supermarket chain in a year to be acquired by private equity after a buyout of No. TDR Capital and the Issa Brothers completed Asda’s takeover in February.

($1 = 0.7284 pounds)

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