Morrisons was at the heart of a bidding war last night as three US private equity firms jostled to buy the British supermarket.
Investment giant Apollo became the third buyout predator circling the chain yesterday after revealing it was considering a 'possible offer'.
It came just 48 hours after Fortress made a £6.3billion takeover bid – beating the £5.5billion offered by rival Clayton, Dubilier & Rice (CD&R).
Apollo's intervention prompted Morrisons shares to surge above the price Fortress was offering yesterday – a sign that investors believe a bidding war will result in an even bigger sale price.
Morrisons was at the heart of a bidding war as three US private equity firms jostled to buy the British supermarket, with investment giant Apollo becoming the third buyout predator
The race to buy Morrisons began last month when it emerged that the firm had rejected CD&R's bid, which it said was too low.
The supermarket's board members, led by chairman Andy Higginson, now back the Fortress bid.
They said the price was 'fair' and claimed the private-equity firm and the consortium backing it would be 'good stewards' of the popular brand.
Executives stand to make millions from the deal, including chief executive Dave Potts, who could receive £19million.
But opposition was growing last night as a top shareholder warned that the supermarket should not be sold 'for the wrong reasons'.
Legal & General, one of Britain's biggest investment groups, said profits should come from making Morrisons 'a better business... not buying its property portfolio too cheaply, levering the company up with debt, and potentially reducing tax paid to the Exchequer'.
The race to buy Morrisons began last month when it emerged that the firm had rejected CD&R's bid, which it said was too low. Fortress have now made a £6.3billion takeover bid
Russ Mould, investment director at the online stockbroker AJ Bell, said: 'Private-equity firms have been sitting on oodles of cash for a long time and they look intent on going on a spending spree.
'We've now got three parties interested and fear of missing out could attract further interest.'
The frenzy over Morrisons has stoked concerns that the supermarket's customers, staff and suppliers could lose out, with buyout firms infamous for using ruthless tactics to extract returns from their purchases.
In the past, private-equity firms have stripped off and sold assets, slashed retirement payouts and laid off staff to wring out efficiencies from firms they take over.
The Daily Mail is calling for more transparency in the sector and an end to sharp practices.
The emergence of Apollo – a firm once dubbed 'Wall Street's apex predator' – as a potential buyer is likely to heighten concerns.
Its founders have made billions of pounds by snapping up firms at bargain prices and imposing brutal cost-cutting measures before paying themselves handsome dividends and management fees.
Until recently Apollo was led by co-founder Leon Black, a billionaire described by Bloomberg as 'the most feared man in the most aggressive realm of finance'.
The 69-year-old hosts extravagant birthday parties attended by celebrities and politicians, with Sir Elton John said to have performed at his 60th.
He stepped aside as chief executive of Apollo in March after details of his business relationship with paedophile financier Jeffrey Epstein were made public and a rape allegation, which he denies, was made against him.
Marc Rowan, one of Mr Black's lieutenants and a co-founder, has taken over as chief executive, while Jay Clayton, the former chairman of the US stock market regulator, is the investment firm's chairman.
Apollo was previously in pole position to buy Asda before its rival TDR Capital and the Issa brothers successfully bid £6.8billion. Analysts say it may be keen to get a slice of the grocery market after missing out on Asda.
But to do so it will have to outbid Fortress, an investment firm owned by the Japanese giant SoftBank.
Richard Hunter, of the online service Interactive Investor, said it was 'perfectly feasible' that competition could emerge from the likes of Amazon, which has an online partnership with Morrisons and bought
