The grocer has accepted a 254p takeover offer from private equity group Fortress and is waiting for shareholders’ approval, after rejecting Clayton, Dubilier & Rice’s (CD&R) 230p proposal two weeks ago.
Fellow private equity firm Apollo Global Management confirmed on Monday it is in the preliminary stages of evaluating a possible offer for the FTSE 250 group.
However, another bid would have to be “reasonably above” 254p, the investment bank said, given that Fortress’s deal is all-cash and “comes with reassurance on deal financing and future strategy”.
“We struggle to make the economics add up for a deal above 280p, unless a potential buyer is prepared to take a more robust approach to property sale and leasebacks, or is very optimistic about potential synergies with other assets they might own,” analysts said, adding that “the likelihood that Morrison remains a listed company strikes us as low”.
Barclays hiked the price target to 254p from 190p to be in line with the agreed offer, but maintained the ‘equal weight’ rating.
Shares were trading at 266.63p on Thursday late morning.