Dividends and Apollo Global Management enters takeover battle for Britain’s Morrisons

When we shop we can think globally, but often we think locally, particularly with food companies, however many other countries around the world have the same or similar type of shopping in their country and if you love a particular sector in your country, one idea is to look internationally for similar companies.

In an article by James Davey of Reuters, in Britain, one of the biggest supermarket chain is called Morrisons. It was founded in 1899 and has grown to owing 85% of the nearly 500 stores and 19 mostly freehold manufacturing sites. It makes half the fresh food it sells.

Clayton, Dubilier & Rice (CD&R) made a bid of L 5.52 billion or put the company into play. The board rejected the offer as too low in June and since then JO Hambro made a bid of L 6.5 billion ($ 8.7 billion) then the bid was topped by Fortress Investment Group which is owned by Softbank. Apollo Global Management based in New York announced they were in the hunt for the company but had not made an official bid.

Similar to other countries in the world, the British supermarkets of Tesco, Sainsbury, Asda and Morrisions experienced a jump in sales with the pandemic in place, however the cost of ramping up online delivery hit profits.

Fortress has said it expects no material selling of assets and said its normal operating philosophy is to enpower existing management teams. Morrisons biggest shareholders are Silchester, BlackRock and Columbia Threadneedle or 3 big international investment firms owing 15.2%, 9.6% and 9.4% respectively.

Linking to dividend paying stocks, most of us are bias towards where we live, work and play which means our stock portfolios will tend to reflect this bias. It is good where you are you can easily determine if the company you own are doing well or not doing so well. It must be noted there are similar economies are the world and many of the people do the same thing. Sometimes there are great opportunities outside of your local area, sometimes it is better to stick to your knitting, just be aware and occasionally do homework to see if what alternatives there are out there.

There are more questions than answers, till the next time – to raising questions.

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