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Morrisons (MRW)

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Gengulphus
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Re: Morrisons (MRW)

#436674

Postby Gengulphus » August 22nd, 2021, 4:27 pm

EthicsGradient wrote:
Gengulphus wrote:the fact that they recommended the first actual offer that came along

More than one person has said this, but it's wrong. The first offer of 230p/share from CD&R was rejected by the directors: https://www.reuters.com/business/retail ... 021-06-19/

Now go to the horse's mouth, by reading the CD&R and Morrisons RNS announcements about it. It was a "possible offer" according to the former and a "proposed offer" according to the latter, and both stated that there could be no certainty that an offer would be made. It never became an actual offer - if it had done so, there would have been certainty that an offer had been made, and shareholders would have been asked whether they individually wanted to accept it or to vote on whether they collectively wanted to accept it (depending on the form of the offer - the latter is probably far more likely given the forms of the subsequent offers).

So I stand by what I said: the Morrisons directors recommended the first actual offer that came along - and this is entirely normal for takeovers because earlier proposals don't usually become actual offers (and quite possibly don't become visible at all) without the directors' recommendation. There are exceptions when a bidder 'goes hostile', but they're comparatively rare.

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Re: Morrisons (MRW)

#436697

Postby BT63 » August 22nd, 2021, 5:26 pm

Dod101 wrote:OK maybe not the first bid but they have pretty much recommended every subsequent bid.

Dod


All bids - even the rejected one - have been generous compared to what Mr.Market said the business was worth in recent years. Sure, I've long felt that Morrisons was worth much more (£3 - 4) but my opinion doesn't move the market.

I'm surprised the first bid wasn't accepted since it was at a significant premium to anything seen in the last couple of years.
If the first bid had been rejected and the bidders walked away, with no other bidders materialising, shareholders might be complaining about their shares having dropped back below 200p.

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Re: Morrisons (MRW)

#436710

Postby Bouleversee » August 22nd, 2021, 6:19 pm

When a potential, conditional offer (a.k.a. fishing expedition) is made for a company, surely it is based on what the offeror sees as the minimum potential value of the company under better management than the existing one and in a better climate. The Board would have been mad to proceed any further with negotiations around CD&R's first offer without seeing what other offers came along when the general talk by the 'experts' was of many British companies being undervalued and the likelihood of multiple takeovers as a result . Yes, Mr Market didn't value it highly and presumably a lot of impatient shareholders who, if they are anything like me, would not know how to value a company, had brought the price down by selling. I tend to hang on in the hope of a recovery which doesn't always happen so I am pleased I still own this one. However, I see in the table in the Sunday Times today (based on historic figures) that at the current share price the yield is 0.7 and the P/E ratio is 73.2 , not figures that would induce me to buy, so CD&R and Fortress must be confident of their management skills, cost cutting potential, hidden realisable value and possibly their ability to raise food prices though they seem to me to have gone up quite a lot in recent times already. Wouldn't they be pushing their luck by increasing the offer price any further? Just asking. (What do I know?)

In the meantime, I see that there is now talk of Apollo making an offer for Sainsbury's (another of my holdings) which may complicate things. Too many balls up in the air! With the shortage of van drivers, there are lots of gaps on supermarket shelves and with their pay rate so low (apparently those driving the Ocado vans have only been earning £5 hr! ) I can't see that changing unless pay is increased substantially and I can't see profits shooting up immediately but I should be delighted to be proved wrong.

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Re: Morrisons (MRW)

#436722

Postby BT63 » August 22nd, 2021, 7:57 pm

Bouleversee wrote: However, I see in the table in the Sunday Times today (based on historic figures) that at the current share price the yield is 0.7 and the P/E ratio is 73.2 , not figures that would induce me to buy,


Here's my interpretation of recent accounts:

Including special dividends, the yield at the 285p offer price is 3.9%.
Stripping out Covid exceptionals etc the P/E at 285p would be 16.2x.

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Re: Morrisons (MRW)

#436726

Postby GrahamPlatt » August 22nd, 2021, 8:34 pm

pje16 wrote:Imagine your selling your house
First punter comes along with a joke offer
No
2nd one offers the askling price
Accept
3rd one then offers over 10K over
do you say No
It's all business


Funnily enough, this was precisely the case when we sold our last house.
Sold it to the couple that bid the asking price.

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Re: Morrisons (MRW)

#436743

Postby Bouleversee » August 22nd, 2021, 10:06 pm

BT63 wrote:
Bouleversee wrote: However, I see in the table in the Sunday Times today (based on historic figures) that at the current share price the yield is 0.7 and the P/E ratio is 73.2 , not figures that would induce me to buy,


Here's my interpretation of recent accounts:

Including special dividends, the yield at the 285p offer price is 3.9%.
Stripping out Covid exceptionals etc the P/E at 285p would be 16.2x.


Quite right and the difference between the offer price and Friday's close doesn't make that much difference to those figures. I see the source was Refinitiv of whom I have never heard. Bizarrely, Saturday''s Times figures, provided by Morningstar, were 2.3 and 26.7. I won't waste my time looking at either in future. Happily, your figures make the latest offer more realistic and the possibility of an increased offer more feasible.

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Re: Morrisons (MRW)

#436807

Postby murraypaul » August 23rd, 2021, 10:36 am

Dod101 wrote:Whatever the circumstances, the fact is that the Directors were happy to recommend the much earlier bid of 254p and after several subsequent bids the latest one stands at 285p and the share even higher in the market. I do not care whether I have got it the right way round or not my point is that the Directors were happy to settle for 254p when the fact is that someone thinks the company is worth at least 285p to them. If that does not indicate that the Directors are not very good negotiators and have (or their advisors have) no idea what the company is worth I do not know what does. It has in my book left the Directors looking rather silly. There is no point in going on and on about this but that is my point and there is not much more to be said.


The calculation the directors are making is:
Can we reasonably claim that, if the business were to continue running as it is now with no takeover or rumors, we could achieve a share price above the offer price.
If not, they should accept the offer, as it represents higher value for the shareholders than they think they can achieve.
The fact that someone else is prepared to pay even more over the odds doesn't change that.

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Re: Morrisons (MRW)

#436825

Postby Bouleversee » August 23rd, 2021, 11:41 am

murraypaul wrote:
Dod101 wrote:Whatever the circumstances, the fact is that the Directors were happy to recommend the much earlier bid of 254p and after several subsequent bids the latest one stands at 285p and the share even higher in the market. I do not care whether I have got it the right way round or not my point is that the Directors were happy to settle for 254p when the fact is that someone thinks the company is worth at least 285p to them. If that does not indicate that the Directors are not very good negotiators and have (or their advisors have) no idea what the company is worth I do not know what does. It has in my book left the Directors looking rather silly. There is no point in going on and on about this but that is my point and there is not much more to be said.


The calculation the directors are making is:
Can we reasonably claim that, if the business were to continue running as it is now with no takeover or rumors, we could achieve a share price above the offer price.
If not, they should accept the offer, as it represents higher value for the shareholders than they think they can achieve.
The fact that someone else is prepared to pay even more over the odds doesn't change that.


IYHO

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Re: Morrisons (MRW)

#436897

Postby Dod101 » August 23rd, 2021, 5:49 pm

murraypaul wrote:
Dod101 wrote:Whatever the circumstances, the fact is that the Directors were happy to recommend the much earlier bid of 254p and after several subsequent bids the latest one stands at 285p and the share even higher in the market. I do not care whether I have got it the right way round or not my point is that the Directors were happy to settle for 254p when the fact is that someone thinks the company is worth at least 285p to them. If that does not indicate that the Directors are not very good negotiators and have (or their advisors have) no idea what the company is worth I do not know what does. It has in my book left the Directors looking rather silly. There is no point in going on and on about this but that is my point and there is not much more to be said.


The calculation the directors are making is:
Can we reasonably claim that, if the business were to continue running as it is now with no takeover or rumors, we could achieve a share price above the offer price.
If not, they should accept the offer, as it represents higher value for the shareholders than they think they can achieve.
The fact that someone else is prepared to pay even more over the odds doesn't change that.


That is not meeting their fiduciary duty and if your view is widespread that is why I seem sometimes to be a lone voice. They should be looking at any bid on the basis that the company is now 'in play' and it is up to them to get the best price for it, not just a better price than they think they can achieve. In the case of the Morrison Directors that seems not to be very high anyway.

Dod

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Re: Morrisons (MRW)

#437123

Postby idpickering » August 24th, 2021, 4:44 pm

Offer Update - Pension Scheme Trustees' Statement

Morrisons has received the following statement from the Trustees of The Morrisons Retirement Saver Plan and The Safeway Pension Scheme regarding the recommended all cash offer from Market Bidco Limited (a newly incorporated entity formed by Clayton, Dubilier & Rice, LLP in its capacity as adviser to Clayton, Dubilier & Rice, LLC as manager of CD&R Fund XI) for the entire issued and to be issued share capital of Morrisons announced on 19 August 2021 (the "CD&R Offer") and the all cash offer from Oppidum Bidco Limited for the entire issued and to be issued share capital of Morrisons announced on 6 August 2021 (the "Fortress Offer").

Morrisons has agreed to publish the full text of that statement, as set out below. The statement is also available on Morrisons' website at http://www.morrisons-corporate.com/inve ... r-from-cdr and http://www.morrisons-corporate.com/inve ... m-fortress.

Morrisons places significant emphasis on the wider responsibilities of ownership of the Morrisons business and recognises that the Morrisons Retirement Saver Plan and the Safeway Pension Scheme are a major part of that. Morrisons has a long-established pension strategy, which has been agreed with the Trustees, a key aim of which is to ensure that the security of members' benefits in the pension schemes is appropriately protected. Morrisons is supportive of the parties reaching an agreement which protects and supports the pension schemes in an appropriate manner, and will continue to work with all parties to achieve this as soon as possible.


https://www.investegate.co.uk/morrison- ... 00016390J/

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Re: Morrisons (MRW)

#437129

Postby scrumpyjack » August 24th, 2021, 4:52 pm

Dod101 wrote:
murraypaul wrote:
Dod101 wrote:Whatever the circumstances, the fact is that the Directors were happy to recommend the much earlier bid of 254p and after several subsequent bids the latest one stands at 285p and the share even higher in the market. I do not care whether I have got it the right way round or not my point is that the Directors were happy to settle for 254p when the fact is that someone thinks the company is worth at least 285p to them. If that does not indicate that the Directors are not very good negotiators and have (or their advisors have) no idea what the company is worth I do not know what does. It has in my book left the Directors looking rather silly. There is no point in going on and on about this but that is my point and there is not much more to be said.


The calculation the directors are making is:
Can we reasonably claim that, if the business were to continue running as it is now with no takeover or rumors, we could achieve a share price above the offer price.
If not, they should accept the offer, as it represents higher value for the shareholders than they think they can achieve.
The fact that someone else is prepared to pay even more over the odds doesn't change that.


That is not meeting their fiduciary duty and if your view is widespread that is why I seem sometimes to be a lone voice. They should be looking at any bid on the basis that the company is now 'in play' and it is up to them to get the best price for it, not just a better price than they think they can achieve. In the case of the Morrison Directors that seems not to be very high anyway.

Dod


In a takeover situation the directors are strictly limited in what they can say and whilst they say they recommend the offer, they (or rather their investment bankers) will behind the scenes be actively looking for higher competing offers and to in effect start an auction. So I don't think it's fair to accuse them of rolling over and not meeting their fiducary duty simply because they publicly recommend and offer and then a few days later a higher one turns up. This is one reason why they usually advise shareholders to do nothing 'at this stage'. (code for don't sell in the market 'cos we are trying to get a higher bid)

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Re: Morrisons (MRW)

#437132

Postby Arborbridge » August 24th, 2021, 5:05 pm

I must say that at 290p it is very tempting to sell out of half the stock to hedge one's bets - but we did nothing today.


Arb.

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Re: Morrisons (MRW)

#437140

Postby TahiPanasDua » August 24th, 2021, 5:39 pm

Arborbridge wrote:I must say that at 290p it is very tempting to sell out of half the stock to hedge one's bets - but we did nothing today.


Arb.

Yes it is very tempting.

If the takeover goes ahead reasonably soon, I will use the proceeds to supplement a property purchase if my offer is accepted. If the takeover is protracted, I will sell MRW. However, I would be happy to hold on long term as the current shenanigans have signalled how solid Morrisons is.

TP2

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Re: Morrisons (MRW)

#437844

Postby Breelander » August 27th, 2021, 4:17 pm

The Morrisons Directors intend to recommend unanimously that Morrisons Shareholders vote in favour of the resolutions to implement the CD&R Offer. In light of their intended recommendation of the CD&R Offer, the Morrisons Directors withdrew their recommendation of the Increased Fortress Offer and, accordingly, announced on 19 August 2021 that it was proposed that the Court Meeting and the General Meeting required to implement the Increased Fortress Offer be adjourned....

...The Morrisons Directors confirm that the Court Meeting and the General Meeting required to implement the Increased Fortress Offer were adjourned earlier today. The Court Meeting will now start at 11.00 a.m. on 5 October 2021 and the General Meeting will start at 11.15 a.m. on 5 October 2021 (or as soon thereafter as the Court Meeting shall have been concluded or adjourned).

https://www.investegate.co.uk/morrison- ... 45050709K/

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Re: Morrisons (MRW)

#440506

Postby idpickering » September 8th, 2021, 7:19 am

Statement regarding offers for Morrisons

Introduction

On 6 August 2021, the boards of directors of Wm Morrison Supermarkets PLC ("Morrisons") and Oppidum Bidco Limited ("Fortress Bidco") announced that they had agreed the terms of an increased recommended all cash offer at an increased offer value of 272 pence for each Morrisons Share, comprising increased cash consideration of 270 pence for each Morrisons Share and the special dividend of 2 pence for each Morrisons Share (the "Fortress Offer") for the entire issued and to be issued share capital of Morrisons.

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.

Following completion of the Auction Procedure, the Morrisons Board anticipates proceeding with either the Fortress Meetings or the CD&R Meetings depending on which offer it is recommending to Morrisons shareholders.


Full item here; https://www.investegate.co.uk/morrison- ... 00060449L/

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Re: Morrisons (MRW)

#440539

Postby pje16 » September 8th, 2021, 9:49 am

From Interactive Investor today

(Alliance News) - Wm Morrison Supermarkets on Wednesday said it has begun talks with the Takeover Panel over the prospect of arranging an auction resolve the bidding battle for the Bradford-based supermarket chain.

Clayton, Dubilier & Rice and Softbank Group Corp-owned Fortress are the two suitors in the running to acquire the company, though Morrisons noted that neither have made final offers.

"Following completion of the auction procedure, the Morrisons board anticipates proceeding with either the Fortress meetings or the CD&R meetings depending on which offer it is recommending to Morrisons shareholders," the company added.

Full story here: if you have an account
https://www.ii.co.uk/secure/my-news-fee ... 2345670400

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Re: Morrisons (MRW)

#440847

Postby idpickering » September 9th, 2021, 7:23 am

INTERIM RESULTS FOR THE HALF YEAR TO 1 AUGUST 2021

Strategic and operating highlights

Very strong two-year Group like-for-like (LFL) sales(1) ex-fuel/ex-VAT of 8.4%

Online LFL of 48.0% (237.1% on a two-year basis)

Wholesale LFL of 18.1% (36.7% on a two-year basis)

Significant acceleration of Morrisons Daily roll-out with our partner McColl's: now 350 McColl's store conversions by Nov 2022, up from original target of 300 by end-2023

Morrisons on Amazon' now expanded to over 60 towns and cities, covering 60% of the British population and accounting for more than 10% of sales in the majority of stores offering the service. We are also supplying the new Amazon Fresh UK stores

Morrisons stores offering Deliveroo grocery home delivery increased from 183 to 328

Several new Sustain and community initiatives, including commitments to Net Zero carbon agriculture by 2030 and removing all plastic bags from our stores by early 2022, and our Growing British Brands and Seeds of Hope campaigns

Financial summary

Total revenue including fuel up 3.7% to £9.05bn (2020/21: £8.73bn)

Group LFL ex-fuel/ex-VAT down 0.3% (2020/21: up 8.7%)

Q2 Group LFL ex-fuel/ex-VAT down 3.7% (Q2 2020/21: up 12.3%), including a retail contribution to LFL of -4.6% (Q2 2020/21: up 11.1%). Two-year Q2 Group LFL of 8.1%

PBT and exceptionals(2) down 37.1% to £105m (2020/21: £167m*), impacted in-year by £41m of COVID-19 direct costs, and £80m lost profit in cafés, fuel and food-to-go

PBT and exceptionals adjusted for rates timing of £93m up 41.9% (2020/21: £74m*)

Basic EPS before exceptionals(2) down 37.0% to 3.35p (2020/21: 5.32p*)

Statutory profit before tax down 43.4% to £82m (2020/21: £145m)

Free cash inflow(3) £266m (2020/21: outflow £228m)

Net debt £3,026m (2020/21 year end: £3,169m)

No interim dividend declared given offers from CD&R and Fortress (2020/21: 2.04p)



https://www.investegate.co.uk/morrison- ... 00051911L/

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Re: Morrisons (MRW)

#441267

Postby pje16 » September 10th, 2021, 2:11 pm

I just had a document from Interactive Investor which contained the following information

Scheme of Arrangement - Update
WM Morrison Supermarkets plc are conducting a General Meeting and a Court Meeting on 5th October 2021. The meetings concern an offer from Fortress Investment Group LLC for the entire issued share capital of Morrisons, at a rate of GBP 2.70 per share and an additional dividend payment of GBP 0.02 per share.
A second General Meeting and Court Meeting is expected to be confirmed for the same date, concerning a second offer from CD&R LLC, at a rate of GBP 2.85 per share.
Further details will be issued upon confirmation of the details following the meetings.

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Re: Morrisons (MRW)

#442891

Postby EthicsGradient » September 17th, 2021, 8:34 am

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?

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Re: Morrisons (MRW)

#442977

Postby Gengulphus » September 17th, 2021, 12:15 pm

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


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