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Retail

Apollo In Discussions With Fortress About Joining Bid For Morrisons

Apollo Global Management has announced that it is in talks to join a consortium led by Fortress Investment Group, which has agreed a £6.3 billion (€7.29 billion) takeover of supermarket group Morrisons.

Private equity group Apollo said it does not intend to make an offer for Morrisons other than as part of the Fortress-led consortium.

Apollo's decision reduces the chance of a takeover battle for Morrisons, given that it had said it was evaluating its own bid.

Unsolicited Proposal

The offer from Fortress, along with Canada Pension Plan Investment Board and Koch Real Estate Investments, exceeded a £5.52 billion pound unsolicited proposal from Clayton, Dubilier & Rice (CD&R), which Morrisons rejected in June.

Apollo said it had noted Fortress's intentions regarding the Morrisons business and all its stakeholders.

"Should these discussions lead to any transaction, Apollo would be fully supportive of Fortress's stated intentions regarding Morrisons," it said.

Good Track Record

Earlier this month, analyst Chris Elliott of Edge by Ascential said that Fortress Investment Group is well-positioned to contribute to the success of Morrisons, with the Softbank-owned group having a "track record of supporting the grocery industry", through investments in firms such as A&P and Circle K.

Elsewhere, Ross Hindle of Third Bridge noted that Morrisons vertically-integrated supply chain and wholesale structure makes it 'very attractive' for private equity investors.

Morrisons reported a 2.7% increase in sales in the first quarter of its financial year.

News by Reuters, edited by ESM. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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