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Morrisons (MRW)

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EthicsGradient
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Re: Morrisons (MRW)

#443109

Postby EthicsGradient » September 17th, 2021, 5:52 pm

Gengulphus wrote:
EthicsGradient wrote:AJ Bell (ie YouInvest) have given me a Corporate Action to vote on for this, which appears to be to accept the "Oppidum Bidco", ie Fortress, offer. The half-year results from 9th Sept say the board now recommends the CD&R offer; on 8th Sept, they were still talking about setting up an auction. Why am I being asked to vote on the Fortress offer? And has the auction now been trashed?

I suggest you ask AJ Bell why they're asking you to vote on the Fortress offer - they're the only people who know the answer to that question! And as to whether the auction has been "trashed", that would be a major enough development that it would have to be announced in an RNS, and I haven't spotted any such RNS in a look at recent RNSes.

Gengulphus

The half year results, dated 9th Sept, linked to by idpickering just above, start

"The Board has received offers for the company from CD&R and Fortress and is recommending CD&R's offer of 285p per share. Shareholders will be asked to approve this offer at a Court Meeting and General Meeting to be held in or around w/c 18 Oct"

and say nothing about an auction. Dated 8th Sept, we have this:

On 19 August 2021, the boards of directors of Morrisons and Market Bidco Limited ("Market Bidco") announced that they had agreed the terms of a recommended all cash offer at an offer value of 285 pence for each Morrisons Share (the "CD&R Offer") for the entire issued and to be issued share capital of Morrisons.

Competitive situation

On the basis that neither Fortress Bidco nor Market Bidco have declared their offers final, such that either offer may be further increased or otherwise revised, a competitive situation continues to exist.

The Board of Morrisons has engaged with the Panel Executive together with Market Bidco and Fortress Bidco in order to begin discussions around an orderly framework for the resolution of this competitive situation (the "Auction Procedure").

In order to provide sufficient time for the resolution of this competitive situation, including by way of any Auction Procedure, the Board of Morrisons now expects that a scheme document, containing further information about the CD&R Offer and notices of the court meeting and the general meeting to approve the CD&R Offer (the "CD&R Meetings"), together with the associated forms of proxy, will be posted to Morrisons shareholders on or around 25 September 2021. For the purposes of paragraph 3(a) of Appendix 7 of the Takeover Code, the Panel Executive has consented to this arrangement.

The CD&R Meetings will be convened for a date in or around the week commencing 18 October 2021. The meetings to approve the Fortress Offer (the "Fortress Meetings") will be adjourned until the same date.

Any Auction Procedure will take place prior to these shareholder meetings, on a date that will be announced by the Panel Executive in due course.

https://www.londonstockexchange.com/new ... s/15126542

and those 2 seem to be the latest official documents issued by Morrisons. News reports since the 9th have talked as if an auction is still expected, but they're not official. If an auction is still possible, it seems misleading for the half year report to mention the recommended CD&R offer, with price, but not that an auction may still happen.

As far as the AJ Bell thing goes, yes, I'll ask them what they're wittering on about, but I thought someone here might be able to explain. Replies here are always more timely than from the people we pay ...

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Re: Morrisons (MRW)

#443175

Postby vrdiver » September 17th, 2021, 9:50 pm

EthicsGradient wrote:has the auction now been trashed?

Looking at the share price tonight (293.8p, up 2.7p on the day) I'd suggest the market is still expecting an auction, and for some bidders to turn up!

I wouldn't worry too much about responding to the corporate action vote - the official documents, like half-year results etc. will not take into account anything that has happened since the close of that period, whilst the vote in favour of the latest recommended offer is, as far as I can tell, already made obsolete by the decision to hold an auction. I'd guess it was just a paperwork trail lagging the reality of events, rather than anything else.

VRD

(also watching, as a MRW holder)

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Re: Morrisons (MRW)

#443206

Postby Gengulphus » September 17th, 2021, 11:59 pm

vrdiver wrote:
EthicsGradient wrote:has the auction now been trashed?

Looking at the share price tonight (293.8p, up 2.7p on the day) I'd suggest the market is still expecting an auction, and for some bidders to turn up!

I wouldn't worry too much about responding to the corporate action vote - the official documents, like half-year results etc. will not take into account anything that has happened since the close of that period, whilst the vote in favour of the latest recommended offer is, as far as I can tell, already made obsolete by the decision to hold an auction. I'd guess it was just a paperwork trail lagging the reality of events, rather than anything else.

I'd say it's actually more likely to be a delay due to the reality of events, in particular due to the fact that discussions take time. Specifically, on looking again the September 8th RNS doesn't say that there will be an auction, it says "The Board of Morrisons has engaged with the Panel Executive together with Market Bidco and Fortress Bidco in order to begin discussions around an orderly framework for the resolution of this competitive situation (the "Auction Procedure")." - i.e. that discussions were being started between the Board, the two bidders and the Takeover Panel about how they would resolve this competitive situation. They define the term "Auction Procedure" to mean whatever method of resolving it they come up with - the fact that that term uses the word "Auction" suggests they think it's likely to involve some sort of auction, but doesn't promise that it will. It doesn't even promise that the discussions being started will come up with an "Auction Procedure" - it could for example happen that one of the bidders raises their offer and the other gives up before the discussions finalise the details of the "Auction Procedure".

But whatever happens, there will be one or more RNSes before the situation is resolved - if a bidder raises their offer, they'll have to announce the raised offer; if a bidder walks away, they'll have to announce that they've done so; if both stay in the bidding, the Takeover Panel will have to announce the date on which the Auction Procedure (whatever it turns out to be) will happen.

Gengulphus

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Re: Morrisons (MRW)

#445505

Postby idpickering » September 27th, 2021, 7:24 am

Publication of Scheme Document

On 19 August 2021, the boards of Morrisons and Bidco announced that they had reached agreement on the terms of a recommended all cash offer by Bidco for the entire issued, and to be issued, share capital of Morrisons (the "CD&R Offer"). The CD&R Offer is to be implemented by means of a scheme of arrangement pursuant to Part 26 of the Companies Act 2006, which requires the approval of the Scheme Shareholders at the Court Meeting and the Morrisons Shareholders at the General Meeting, and the sanction of the Court.

Publication and posting of the Scheme Document

The Morrisons Board and the Bidco Board are pleased to announce that the circular in relation to the scheme containing, amongst other things, a letter from the Chair of Morrisons, an explanatory statement pursuant to section 897 of the Companies Act 2006, the full terms and conditions of the CD&R Offer, notices convening the Court Meeting and the General Meeting, an expected timetable of principal events and details of the actions to be taken by Morrisons Shareholders and Morrisons CSN Participants (the "Scheme Document"), together with the associated Forms of Proxy and Forms of Instruction, is today being published and posted to Morrisons Shareholders, Morrisons CSN Participants and, for information only, to participants in the Morrisons Share Plans and persons with information rights. Morrisons Shareholders and Morrisons CSN Participants will receive the Scheme Document in accordance with the notice provisions in the Articles and any notice elections they may have given.

Subject to any restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will be made available today on Morrisons' website at http://www.morrisons-corporate.com/inve ... r-from-cdr and on CD&R's website at https://www.cdr-inc.com/morrisons-microsite.

Defined terms used but not defined in this announcement have the meaning given to them in the Scheme Document.


https://www.investegate.co.uk/morrison- ... 00079592M/

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Re: Morrisons (MRW)

#445514

Postby Gengulphus » September 27th, 2021, 8:44 am

idpickering wrote:Publication of Scheme Document

On 19 August 2021, the boards of Morrisons and Bidco announced that they had reached agreement on the terms of a recommended all cash offer by Bidco for the entire issued, and to be issued, share capital of Morrisons (the "CD&R Offer"). The CD&R Offer is to be implemented by means of a scheme of arrangement pursuant to Part 26 of the Companies Act 2006, which requires the approval of the Scheme Shareholders at the Court Meeting and the Morrisons Shareholders at the General Meeting, and the sanction of the Court.

Publication and posting of the Scheme Document

The Morrisons Board and the Bidco Board are pleased to announce that the circular in relation to the scheme containing, amongst other things, a letter from the Chair of Morrisons, an explanatory statement pursuant to section 897 of the Companies Act 2006, the full terms and conditions of the CD&R Offer, notices convening the Court Meeting and the General Meeting, an expected timetable of principal events and details of the actions to be taken by Morrisons Shareholders and Morrisons CSN Participants (the "Scheme Document"), together with the associated Forms of Proxy and Forms of Instruction, is today being published and posted to Morrisons Shareholders, Morrisons CSN Participants and, for information only, to participants in the Morrisons Share Plans and persons with information rights. Morrisons Shareholders and Morrisons CSN Participants will receive the Scheme Document in accordance with the notice provisions in the Articles and any notice elections they may have given.

Subject to any restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will be made available today on Morrisons' website at http://www.morrisons-corporate.com/inve ... r-from-cdr and on CD&R's website at https://www.cdr-inc.com/morrisons-microsite.

Defined terms used but not defined in this announcement have the meaning given to them in the Scheme Document.


https://www.investegate.co.uk/morrison- ... 00079592M/

And last of the significant news in that RNS but definitely not least:
Potential Panel Auction

As at the date of this announcement, neither CD&R nor Fortress has declared its offer final and incapable of being increased. This means that a "competitive situation" exists for the purposes of the Takeover Code. It is expected that, should this competitive situation continue as the date of the Court Meeting and the General Meeting approaches, the Panel will require an auction procedure to be undertaken to provide an orderly framework for the resolution of this competitive situation. Any auction procedure is likely to involve one or more rounds of private bidding in which each bidder is afforded the opportunity to increase its offer price, should it wish to do so. Following the completion of any auction procedure, subject to certain exceptions, neither bidder will be entitled to increase its offer price.

A formal announcement relating to any auction procedure will be made by the Panel in due course if the competitive situation continues. Following the conclusion of any auction procedure, the results of the auction procedure will be announced by the Panel and, ahead of the date of the Court Meeting and the General Meeting and the corresponding proxy voting deadlines, the Morrisons Board will write to Morrisons Shareholders, Morrisons CSN Participants and participants in the Morrisons Share Plans and persons with information rights to update them on the results of the auction procedure and to confirm its recommendation as to the action that they should take. Morrisons will also make an announcement through a Regulatory Information Service setting out the Morrisons Board's view on the revised offers (if any) announced by the offerors, including details of its advice and any intended recommendation to Morrisons Shareholders.

Gengulphus

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Re: Morrisons (MRW)

#446187

Postby EthicsGradient » September 29th, 2021, 9:59 am

Auction announced for Sat 2nd Oct:

The auction procedure will consist of a maximum of five rounds which will all take
place on Saturday 2 October 2021
. In the first round, either offeror may make an
increased bid. If the auction procedure has not concluded in the first round (which it
will if no increased bid is made in the first round), there will be up to three further
rounds, in which an offeror will be eligible to make a bid only if the other offeror made
an increased bid in the immediately preceding round. If the auction procedure has not
concluded after these three further rounds (which it will if no increased bid is made in
a round), there will be a fifth and final round, in which both offerors may make an
increased bid.

Any increased bid lodged in any round of the auction procedure must be at a fixed price
in cash in pounds sterling and in whole pence. Formula bids will not be permitted at
any stage in the auction procedure. A bid lodged at any stage in the auction procedure
may not comprise or include any form of consideration other than cash in pounds
sterling, nor any dividend payable by Morrisons, and must be higher than any offer
previously announced by the other offeror prior to the commencement of the auction
procedure and any bid previously lodged by the other offeror during the auction
procedure.

Additionally, in the fifth and final round of the auction procedure, it will be a
requirement that any increased bid lodged by Fortress must be at an “even” number of
pence and any increased bid lodged by CD&R must be at an “odd” number of pence.
Further, in the fifth and final round, each offeror is permitted to make its offer subject
to a condition that the other offeror also makes a bid in that round.
...
Following the Panel Executive’s announcement of the result of the auction procedure
and by no later than 07.00 on 4 October 2021, each of the offerors is required to make
an appropriate announcement under Rule 2.7 of the Code of a revised offer in respect
of its latest bid lodged in accordance with the auction procedure (or alternatively, if it
did not lodge an increased bid during the auction procedure, a confirmation of its preexisting offer).

Following the release of the announcements by both offerors referred above and by no
later than 07.00 on 5 October 2021, Morrisons is required to make an announcement in
accordance with Rule 30.1 of the Code setting out its board’s views on the revised offers
(if any) announced by the offerors, including details of its advice and any intended
recommendation to Morrisons shareholders
. This announcement may be combined with
an announcement made by an offeror under the preceding paragraph.

https://www.thetakeoverpanel.org.uk/pub ... -procedure

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Re: Morrisons (MRW)

#446192

Postby pje16 » September 29th, 2021, 10:09 am

"Morrisons shares were up 1.3% at 295.80 pence in London on Wednesday morning."
https://www.ii.co.uk/secure/my-news-fee ... 5491777500

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Re: Morrisons (MRW)

#446228

Postby Bouleversee » September 29th, 2021, 11:06 am

I read somewhere that CD&R were planning to register the company in I think it was Cayman, some tax haven anyway which didn't thrill me.

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Re: Morrisons (MRW)

#446247

Postby Bouleversee » September 29th, 2021, 12:04 pm

Bouleversee wrote:I read somewhere that CD&R were planning to register the company in I think it was Cayman, some tax haven anyway which didn't thrill me.

I have just rummaged through my unfinished newspapers and found an article in The Times Business on Monday headed "Tax Query over Morrison's as bidder sets up Cayman-based vehicle" which you should be able to get if you Google that. It starts with "The American private equity firm that has launched a £7 billion takeover for Morrisons has set up (a) vehicle in the Cayman Islands to be the ultimate owner of the supermarket chain, which has led to concerns about the tax implications of buyout deals." It goes on to say that this could weaken their argument that they are the best "responsible" owner for Morrisons. (Asda is now owned through a Jersey vehicle after its buyout.) Worth reading the whole article and the various complex arguments and denials. The last para mentions that CD&R is spending £348m including fees to advisers and Morrisons £56.8m on fees. If it's worth all that expense the s.p. must hae been and probably still is ridiculously low. How many other UK companies does this apply to? Is this because so many have chosen to invest abroad or because British management doesn't do a very good job in running their companies? Will the tide turn?

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Re: Morrisons (MRW)

#447210

Postby zharrt » October 2nd, 2021, 12:33 pm

CD&R wins the auction with a bid of 287, I’m happy as my average purchase price was a little over 200 but would have been happier if it kept as it is

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Re: Morrisons (MRW)

#447225

Postby Bouleversee » October 2nd, 2021, 1:27 pm

That's 10p less than Friday's closing price. Still not enough i.m.o.

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Re: Morrisons (MRW)

#447231

Postby Breelander » October 2nd, 2021, 1:44 pm

Report here:

LONDON (Reuters) - Clayton, Dubilier & Rice (CD&R) has won the auction for Morrisons with a 7 billion pound ($9.5 billion) bid...
https://www.reuters.com/article/morriso ... sinessNews

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Re: Morrisons (MRW)

#447234

Postby zharrt » October 2nd, 2021, 1:47 pm

Bouleversee wrote:That's 10p less than Friday's closing price. Still not enough i.m.o.


But 61% higher than before the first bid, I guess it depends on your perspective

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Re: Morrisons (MRW)

#447244

Postby Bouleversee » October 2nd, 2021, 2:04 pm

zharrt wrote:
Bouleversee wrote:That's 10p less than Friday's closing price. Still not enough i.m.o.


But 61% higher than before the first bid, I guess it depends on your perspective


And what you paid. :)

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Re: Morrisons (MRW)

#447251

Postby Dod101 » October 2nd, 2021, 2:49 pm

Bouleversee wrote:
zharrt wrote:
Bouleversee wrote:That's 10p less than Friday's closing price. Still not enough i.m.o.


But 61% higher than before the first bid, I guess it depends on your perspective


And what you paid. :)


I can understand your disappointment because the auction turned out to something of a damp squib. Below the market price and just above the last bid in August. The whole saga has been a bit strange.

Dod

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Re: Morrisons (MRW)

#447260

Postby Bouleversee » October 2nd, 2021, 3:30 pm

I agree, Dod, but it's not over till the fat lady sings. I think most of the institutional holders have sold out but something could still happen to upset the apple cart. I see the price was quite a bit highrr earlier in the day. I wonder who was buying and in what quantity.

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Re: Morrisons (MRW)

#448098

Postby idpickering » October 5th, 2021, 4:23 pm

Offer Update

On 2 October 2021, the boards of directors of Morrisons and Market Bidco Limited ("CD&R Bidco") announced that they had reached agreement on the terms of a recommended all cash offer for the entire issued and to be issued share capital of Morrisons at an increased offer value of 287 pence for each Morrisons Share (the "CD&R Final Offer").

The announcement of the CD&R Final Offer followed the conclusion of the auction procedure which took place earlier on 2 October 2021 between CD&R Bidco and Oppidum Bidco Limited ("Fortress Bidco"). Fortress Bidco increased its offer such that the consideration payable to Morrisons Shareholders would be 286 pence per Morrisons Share (the "Fortress Auction Offer").

In light of the superior proposal of 287 pence per Morrisons Share under the CD&R Final Offer as compared to the Fortress Auction Offer, the Morrisons Directors recommend unanimously that Morrisons Shareholders vote in favour of the Scheme at the Court Meeting and the Resolution to be proposed at the General Meeting, each in respect of the CD&R Final Offer and convened for 19 October 2021.


Item continues, see here;

https://www.investegate.co.uk/morrison- ... 15060924O/

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Re: Morrisons (MRW)

#448112

Postby Bouleversee » October 5th, 2021, 4:56 pm

Weren't we going to get a small dividend as well with CD&R's previous offer? Has that gone by the board now, in which case we will be getting less rather than more, won't we?

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Re: Morrisons (MRW)

#448141

Postby Gengulphus » October 5th, 2021, 6:18 pm

Bouleversee wrote:Weren't we going to get a small dividend as well with CD&R's previous offer? Has that gone by the board now, in which case we will be getting less rather than more, won't we?

No. Fortress's 252p offer and their increased 270p offer each had a 2p dividend as an extra, making their real values about 254p and 272p respectively, but Clayton, Dubilier & Rice's 285p offer did not have any such extra. So their final offer of 287p really is an increase on the 285p offer, albeit a small one.

And incidentally, the Takeover Panel's auction procedure expressly forbade any such extras:

Any increased bid lodged in any round of the auction procedure must be at a fixed price in cash in pounds sterling and in whole pence. Formula bids will not be permitted at any stage in the auction procedure. A bid lodged at any stage in the auction procedure may not comprise or include any form of consideration other than cash in pounds sterling, nor any dividend payable by Morrisons, and must be higher than any offer previously announced by the other offeror prior to the commencement of the auction procedure and any bid previously lodged by the other offeror during the auction procedure.

and the reason for those requirements seems clear to me: they wanted the question of which of two bids is the better one to be quickly and easily decidable, in a way that applies equally to all shareholders. For example, I say above that the real value of Fortress's first offer was about 254p, but a basic-rate taxpayer whose taxable income, taxable dividends and net taxable gains are above the personal allowance, dividend allowance and CGT allowance respectively would slightly prefer 252p + a 2p dividend to a straight 254p (due to paying 7.5% tax on the 2p dividend rather than 10% on the 2p higher offer), while a similarly-placed higher-rate taxpayer would have the opposite mild preference (due to those tax rates being 32.5% and 20% respectively)...

Gengulphus

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Re: Morrisons (MRW)

#448142

Postby Bouleversee » October 5th, 2021, 6:29 pm

Thanks for putting me straight, Geng. Makes sense but it means I won't be getting much more than my money back after quite a number of years, though better than making a loss.


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