The Morrisons bid war is set to escalate after Terry Leahy fails to deliver a knockout

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When former Tesco chief Sir Terry Leahy found out he would be receiving an honor for his contribution to retail a decade ago, he had one request – that the personal hero, the late Sir Ken Morrison, gave it to him.

Sir Kane, son of the Morrisons founder, was happy to oblige. “There was real respect and affection between the two of them,” said one attendee.

Sir Terry played that call on Thursday evening in a video when he unveiled the £7 billion takeover of the supermarket chain by Clayton’s US private equity firm, Dobellier & Rice (CD&R), where he is a senior advisor.

“I knew Sir Ken Morrison well and understood his values ​​and vision,” he said, arguing that CD&R would be a good keeper for the 122-year-old company based in Bradford.

Documents released by CD&R, after it agreed to a 285p share offer with Morrisons’ board of directors Thursday night, suggest a similar kind-hearted approach.

The company presents its intentions as nearly identical to that offered by Fortress, the competitor I just introduced. CD&R says its plans are to protect the employment and pension rights of all supermarket employees and expects “no material change to Morrisons’ headcount”.

The Sir Terry company added that it did not intend to engage in “any material store sale and leaseback transactions” after concerns were raised that private equity buyers could sell off large portions of the property portfolio.

The promises were hammered out in hours of virtual conversations on Zoom with the Morrisons board of directors until about 730 p.m., with the negotiations given the codename Project Magnum.

A statement detailing the grocer’s approval of the offer – worth £7 billion plus £2.7 billion in debt – quickly followed, with the announcement landing shortly before 9pm on Thursday.

“Everyone is so paranoid that someone would come up with something else,” a source in the city says of the timing. “Get your nose up front and hold the moment. They wanted to announce it as soon as it was agreed.”

Morrison had earlier recommended to investors to accept a £6.7 billion bid from a consortium led by US-based rival investment group Fortress.

Aside from Leahy, CD & R’s Counterbid principal coordinators are fellow executives Marco Herbst and Gregory Lai. The pair played major roles in similar deals with separate B&M and the Motor Fuel Group gas station.

Herbst was a non-executive director at B&M after CD&R acquired a large stake in the company in 2012. It was merged with its stock market listing in 2014.

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