The takeover panel has set up a system whereby Clayton, Dubilier and Rice (CD&R) and Fortress’s consortium can up their bids on a first round.
If no increased bid is made then, there will be up to three further rounds, in which an offeror can make one only if the other offer has made an increased bid in the immediately preceding round.
If the auction procedure has not concluded after these three further ones, there will be a fifth and final round.
The process could also be ditched if the suitors aren’t willing to increase their offers, although some City observers think it’s unlikely.
“You might think that the current energy and petrol crisis and driver shortages etc might put off CD&R and Fortress from going crazy in tomorrow’s formal auction for Morrisons, but the share price of c294p is implying that they will overlook the short-term industry problems and that the stock market is pretty confident that the bidding will go over 300p,” commented independent analyst Nick Bubb.
The saga started in June, when CD&R first approached the grocer with a GBP5.5bn offer that was immediately rejected.
Fortress offered GBP6.3bn in July, upped to GBP6.7bn after shareholders complained it was undervaluing the FTSE 100 group.
CD&R came back with a GBP7bn offer in August, which the Morrisons board decided to back after telling investors to ignore the Fortress one. Shareholders are due to vote on it on 19 October.
Both suitors said they will keep Morrisons’ Bradford headquarters and the existing executive team, led by boss David Potts, who’s in for a GBP10mln payday if a takeover goes ahead.
Other commitments, albeit not legally binding, are not to sell the freehold store estate and to keep staff pay rates.
Shares were changing hands for 295.25p on Friday at noon, having risen 0.2% during the morning.