Morrisons Braced for Counterbid

The Times (London) (08/01/21) Chambers, Sam

The private equity firm Clayton, Dubilier & Rice (CD&R) is poised to kick off a bidding war for Morrisons (MRWSY) amid mounting opposition to the £6.3 billion offer on the table for the grocer from a consortium led by American buyout rival Fortress. CD&R is understood to have been lining up equity and debt financing for a counterbid that could come as soon as this week. Should it win the auction, CD&R plans to open a chain of Morrisons convenience stores at the 900-plus petrol stations operated by Motor Fuel Group, which it has owned since 2015. CD&R, advised by former Tesco boss Sir Terry Leahy, is also understood to be focusing on how it can use excess space in Morrisons’ supermarkets more imaginatively. The firm intends to work alongside the chain’s executive team, led by chief executive David Potts. Silchester, Morrisons’ biggest shareholder with a 15.1% stake, last week criticized the board for not allowing more time for higher competing offers to emerge. Two other top 20 shareholders — JO Hambro and M&G — also said the 252p-a-share offer undervalued the supermarket chain. CD&R has until August 9 to table an offer. The stage is set for a bidding war. Fortress has enlisted investment giant GIC, Singapore’s sovereign wealth fund, to join its consortium, which is already backed by Canadian pension fund CPPIB and a division of the billionaire Koch family empire. Sources said other private equity firms and family offices had also been running the rule over Morrisons. A source close to one suitor said there were likely to be multiple incremental bids, with the potential for the eventual price to hit 290p a share. Morrisons shares closed at 264p on Friday.

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Danone to Replace Bulk of Board After Investor Onslaught

International Business Times (07/29/21)

Danone (DANOY) announced that it would reconstitute almost its entire 12-person board months after investors forced the French food and beverage giant's CEO to resign. Former CEO Franck Riboud was ousted, as was his successor Emmanuel Faber. "The renewal will be completed by the general shareholders meeting of the spring of 2023," the group stated. The only board members to survive the cull were chairman Gilles Schnepp and two staff representatives. Danone has separated its business into four divisions, including dairy and plant-based products, waters, early life nutrition, and medical nutrition. Faber was forced out in March over criticism that his focus on social responsibility was restraining Danone's profitability, with foreign investors unhappy about the company's underperforming share price. U.S. fund Artisan Partners (APAM) and U.K.-based Bluebell Capital were among dissident shareholders accumulating stakes in Danone in order to push change. During Faber's tenure, Danone added a mission statement to its mandates combining profitability with social responsibility and environmental targets. Former finance director Cecile Cabanis will also leave Danone's board, having only recently been appointed vice president. Faber has been replaced by Antoine de Saint-Affrique, who joins in September from Swiss chocolate group Barry Callebaut (BRRLY). He spent most of his career at the food and consumer goods conglomerate Unilever (UL), overseeing its food division from 2011 to 2015. Meanwhile, Danone's second-quarter financial performance topped analysts' expectations. Sales rose 3.6% to close to 6.2 billion euros ($7.4 billion) and net profit by 5.2% to 1.07 billion euros. However, Danone's profit margin from ordinary operations was hit by soaring commodities prices, shrinking from 14% to 13.1% year over year.

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