News & Analysis

They think it’s all over. It is now!

Andrew Saks, Monday, 12 July 2021

No, not that. In this case, it refers to supermarket bidding wars.

Unlike that famous phrase that was coined in 1966 by Kenneth Wolstenholme during his BBC TV commentary in the closing moments of the 1966 FIFA World Cup Final, the subject of this final is a milestone in a journey that is much older.

Morrison's supermarkets, founded in 1899, some 122 years ago by stoic Yorkshireman William Morrison, has managed to not only rise from its regional origins to become a massive national competitor to the dominant establishment such as Tesco, ASDA and Sainsbury's, but has shown its business acumen in recent weeks, having fended off substantial acquisition offers from extremely high-profile suitors, a strategy which has served it well.

The stock market's keen observers have been watching Morrison's very closely, especially after the company rejected a £5.5 billion offer, and subsequently a £6.3 billion offer, with the Morrison's board having brushed such interest off, saying that these are undervaluing the company.

It would have been very easy to regard such an approach as stubborn, but stubbornness has been a Morrison's strong point throughout its history, the founding Morrison family having stuck firmly to principle during the company's rise to prominence from its humble but high-quality butchers shop origins.

This level of tenacity has proved to be a good strategy as the US consortium behind the agreed takeover has now offered £9.5 billion and assured that it will not damage the legacy of the supermarket’s founding family.

Share prices are up today by 2.45 points which is 0.92%, which puts it at a five year high.

Morrison's itself is an expert in growing its business via acquisitions, as its foray into national presence and came in 2004, before which Morrisons store locations were primarily focused in the North of England, but with the takeover of Safeway in that year, the company's presence increased significantly in the South of England, Wales and Scotland.

As of 2016 the company had 494 supermarkets across England, Wales and Scotland, as well as one in Gibraltar.

A price-matching market which is hugely competitive, British supermarkets are brilliant in the same way that they are cut-throat, however Morrison's has mastered this very successfully.

All that awaits now is to observe the movements if or when it completes this sale.

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