onthemove wrote:Gengulphus wrote:The share price hasn't reacted much - it's fallen less than a penny, and is still more than 7p above the recommended offer's 254p. Whether that's because the market is expecting a higher offer to actually materialise from Clayton, Dubilier & Rice, or ...
According to Yahoo...
I haven't checked the details, but I was under the impression this meant they couldn't return with another bid now for a period of time.
That's actually the reason behind why I happened to check the Takeover Panel's disclosure list! I remembered that the announcement of Clayton, Dubilier & Rice's takeover approach had said that they had to either announce a firm bid or that they would
not be making a bid by a deadline, and vaguely remembered that the deadline was a few weeks into July. So I went back to the
RNS announcing the approach and found that it says:
In accordance with Rule 2.6(a) of the Takeover Code, CD&R is required, by no later than 5.00 p.m. on 17 July 2021, to either announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Takeover Code or announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Takeover Code applies. This deadline can be extended with the consent of the Panel on Takeovers and Mergers in accordance with Rule 2.6(c) of the Takeover Code.
Note that it says that an announcement of one type or the other is
required to be made - there isn't the option of letting the deadline lapse (so the author of the Yahoo quote you've found is on decidedly shaky ground...). However, no such announcement had been made, so I looked for an explanation. The obvious possibility was that the deadline had been extended with the consent of the Takeover Panel, but I also didn't find any announcement that that had happened. What I did find was that in the Takeover Panel's disclosure tables, which are published shortly after the start and end of each trading day (and occasionally at other times) and can be found from
https://investegate.co.uk/Index.aspx?se ... over+Panel, the bid by Clayton, Dubilier & Rice had changed from saying "
Rule 2.6 deadline: 17:00 17-Jul-2021" to saying "
Rule 2.6 deadline: to be determined", and checking through those tables (using the 'binary chop' technique of repeatedly checking halfway through the date range in which the change was known to have happened to pin it down to the first or second half of that range) fairly quickly revealed that it had happened on the morning of July 5th. That was the day that the Fortress bid was announced, so it looked like that had somehow triggered the change, and digging into Rule 2.6 of the Takeover Code revealed Rule 2.6(b):
Rule 2.6(a) will not apply, or will cease to apply, to a potential offeror if another offeror has already announced, or subsequently announces (prior to the relevant deadline), a firm intention to make an offer for the offeree company. In such circumstances, the potential offeror will be required to clarify its intentions in accordance with Rule 2.6(d) below.
Rule 2.6(d) then says:
When an offeror has announced a firm intention to make an offer and it has been announced that a publicly identified potential offeror might make a competing offer (whether that announcement was made prior to or following the announcement of the first offer), the potential offeror must, by 5.00 pm on Day 53, either:
(i) announce a firm intention to make an offer in accordance with Rule 2.7; or
(ii) announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 applies.
(See Section 4 of Appendix 7 where the first offeror is proceeding by means of a scheme of arrangement.)
Fortress's offer is being made by a scheme of arrangement, so that then leads to Section 4 of Appendix 7, which says:
4 HOLDING STATEMENTS
(a) When an offeror has announced a firm intention to make an offer to be implemented by means of a scheme of arrangement and it has been announced that a potential competing offeror might make an offer (see Rules 2.6(d) and (e)), the Panel will normally require the potential offeror to clarify its position by no later than 5.00 pm on the seventh day prior to the date of the shareholder meetings.
(b) Where appropriate, however, taking into account all relevant factors, including:
(i) the interests of offeree company shareholders and the desirability of clarification prior to the shareholder meetings; and
(ii) the time which the potential offeror has had to consider its position,
the Panel may permit the potential offeror to clarify its position after the date of the shareholder meetings but before the date of the court sanction hearing.
(c) The Panel will announce the deadline by which clarification is required under paragraph (a) or (b) above.
So the answer is that Fortress's offer has automatically caused the deadline for Clayton, Dubilier & Rice to be extended, and the extension is probably to a date which is seven days before the shareholder meetings, which presumably cannot be announced yet because the date of those shareholder meetings hasn't been announced.
Probably rather more detail about the Takeover Code than most people will want to know... But an illustration of the sort of detective work that's sometimes needed to work out what's going on, and it did have the side-effect of causing me to notice that Apollo's potential bid had vanished.
onthemove wrote:The same article also says...
"The company [Apollo] reserved the right to launch a full bid if the Fortress deal falls through."
Yes, that's in my quote in the above post. In my HYP Practical board post, I thought it appropriate just to say that Apollo had "basically committed itself" rather than "committed itself" - the crucial point is that what it's said means that it's no longer in this bidding war for Morrisons, while the various let-outs (which also include the general let-out that a commitment not to bid for a company only lasts for 6 months) normally only allow taking part in another bidding war.
onthemove wrote:(Caveat, like you, I'm not too interested in the details, because I sold my MRW early last week, figuring a bird in the hand and all that ... I'm only watching to see whether my decision paid off or not... though I won't be too upset if I get wrong footed.. unless perhaps it finally gets taken over at 300p+, but at this moment I'm not sure that seems likely... at the time I sold, it seemed to be potential for 5% up or 5% down from where it was based on the numbers being banded around... and lets not forget, any deal needs approval and there are some mumblings that some of the big shareholders aren't too happy, and also the government seems to have taken an interest and may want to be seen to be 'protecting uk interests' or some such, so even the 254p isn't necessarily a given; it could still end up falling through and going lower than that)
Yes, indeed. I don't think it at all likely that a Conservative government will block this bid in order to 'protect UK interests' (there have been takeovers with far clearer cases that haven't been blocked, such as the 2016 takeover of ARM Holdings) or that this bid will fall through for any other reason. But it could happen - and I'm completely relaxed about that possibility: if it does, I might even end up buying back in... But that's clearly not going to happen until this bidding war is over, so barring something completely unexpected, I'm out until at least then!
Gengulphus