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Morrisons takeover battle will go to UK auction on Oct. 2

By Reuters

<div> <p><span class="caps">LONDON</span> -A $9.5-billion fight for British supermarket Morrisons will be decided at an auction on Saturday, when two U.S. private equity groups will go head-to-head in up to five rounds of bids. </p> <p>Britain’s Takeover Panel said on Wednesday that Clayton, Dubilier & Rice (CD&R) and Fortress Investment Group had agreed to settle the matter in a one-day auction. </p> <p>CD&R, a U.S. private equity firm, started its pursuit of Britain’s fourth-largest grocer in June. </p> <p>Softbank-backed Fortress entered the fray in July, winning the backing of the board of Morrisons for bids at 252 pence and then 270 pence a share.</p> <p>CD&R returned to trump Fortress with a 285-pence offer, valuing the supermarket at 7 billion pounds ($9.5 billion).</p> <p>Given that neither bidder had declared its offer final, the Takeover Panel said all of the parties had agreed to an auction process to decide the outcome.</p> <p>Morrisons shares were trading up 1.3% at 296 pence in early trading on Wednesday. </p> <p>The battle for Morrisons is the most high-profile amid a raft of bids for British companies this year, reflecting private equity’s appetite for cash-generating UK assets.</p> <p>With more than one bidder increasingly targeting one company, previously rare auctions have become more frequent.</p> <p>The most recent on Sept. 22 resulted in a consortium of funds managed by Ancala Partners and Fiera Infrastructure paying 372 pence a share to buy waste management company Augean, a near 10% rise on the highest offer before the auction.</p> <p>Other auctions set up this year to decide the fate of security firm G4S and pharmaceutical company Vectura were scrapped when one of the parties declared their bid final, a development that could still scupper the Morrisons tussle. </p> <p>($1 = 0.7311 pounds)</p> </div>