Shares in supermarket group WM Morrison were lifted to their highest in more than seven-and-a-half years today, amid signs that a private equity takeover battle for the FTSE 250 company is likely.
Last month the company rejected a 230p-a-share approach from Clayton, Dubilier & Rice, and today recommended that shareholders accept an offer of 254p a share from a consortium comprising Fortress Investment Group, Canada Pension Plan Investment Board and Koch Real Estate Investments. The recommended deal values Morrisons at £6.3bn.
However, as Morrisons confirmed the planned takeover, private equity firm Apollo Global Management announced that it is in “the preliminary stages of evaluating a possible offer”.
That news led to the target’s shares opening at 268p, and they spent the day trading comfortably above the recommended offer from the Fortress consortium, closing up 11.6% at 267.5p. That suggests that investors expect a better bid from Apollo or for the Fortress consortium to improve its own offer.
Also trading up on takeover talks was student accommodation group GCP Student Living.
After the markets closed on Friday, the company said it has received a takeover approach from a consortium of Scape Living and iQ Student Accommodation, backed by the companies’ respective shareholders, APG Asset Management and Blackstone.
APG already owns an 11.1% stake in GCP.
GCP said that it continues to engage with the consortium, but added that it expects “a material increase in its property valuation for the period to 30 June 2021”.
The company’s shares finished the day at a 17-month high of 193.4p, up by 14.3%.
The FTSE 100 finished trading at 7,165, a rise of 0.6%. The FTSE 250 was up 1.2% to 23,022.
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