Insights on the Acquisition of Morrisons by Fortress Investment Group
Fortress Investment Group has one of its most prosperous years in 2021. This alternative asset investment management was launched roughly two decades ago and specializes in managing credit funds, liquid hedge funds, and private equity. Much of the company’s success over the last three years can be partly credited to it being purchased by the financial juggernaut SoftBank in 2018.
In 2021, the New York based alternative asset manager has spent most of its resources pursuing the purchase of Morrisons, one of Britain’s leading supermarket chains. Here are some insights into the acquisition deal, which was completed recently.
Why was the Morrisons acquisition so important?
Morrisons is a heritage British supermarket chain launched in 1899 and currently has over 500 stores and over 110,000 full-time employees. Additionally, the supermarket chain is considered the fourth most popular grocer. Fortress Investment Group has been looking to get into the highly profitable British retail market for years, but it has been unable to.
With the backing of SoftBank, the alternative asset manager decided to make its most formidable entry attempt this year. In May, it made an unsolicited offer to purchase Morrisons for 220 pence per share. Morrisons shareholders quickly rejected the offer, forcing Fortress Investment Group to increase its purchase offer to 254 pence per share.
A determined fight
Although the new offer pushed the valuation of the supermarket chain to $8.5 million per share, it was still turned down by Morrisons shareholders. The opposition was that the supermarket chain was a British heritage brand, meaning it was worth more than the New York alternative asset manager was offering.
Besides this, other players like the US-based private equity group Clayton, Dubilier & Rice was also making counteroffers making things more difficult. Despite this, Fortress Investment Group put up a determined fight that enabled it to purchase the supermarket chain for $9.3 billion. Go Here for related Information.