Bloomberg reports that Apollo Global Management Inc. said it’s considering an offer for Wm Morrison Supermarkets Plc, heating up a takeover battle for the UK grocer.
Morrison had just agreed over the weekend to a 6.3 billion-pound ($8.7 billion) takeover from a consortium led by Fortress Investment Group. That offer trumped private equity firm Clayton Dubilier & Rice LLC’s 5.5 billion-pound bid, which the supermarket operator had rejected.
Morrison shares surged as much as 12% to a record in London, trading above the level of the Fortress offer.
The possible bidding war underscores the interest in UK supermarkets after this year’s 6.5 billion-pound buyout of Asda, the country’s third-largest operator. Private equity firms are trying to capitalise on a business model boosted during the pandemic thanks to increased grocery spending. Some shareholders are concerned the bidders might underpay for the assets, with Legal & General Investment Management asking Morrison to publish more information on the value of the grocer’s real estate.
“This signals the biggest shakeup in the U.K. grocery sector for over a decade,” wrote Richard Lim, chief executive of Retail Economics, a UK-based consultancy.