Morrisons shares surge as Apollo mulls bid to challenge Fortress

Shares in UK supermarket chain Morrisons surged 11% on Monday on the prospect of a bidding war as US buyout firm Apollo Global Management said it was considering entering the race after rival Fortress tabled a £6.3bn recommended bid on the weekend.

Apollo confirmed weekend reports that it was "in the preliminary stages of evaluating a possible offer for Morrisons". Shares ross to 266p - well above the 252p-a-share bid tabled by Fortress.

'No approach has been made to the board of Morrisons,' Apollo said, adding: 'There can be no certainty that any offer will be made, nor as to the terms on which any such offer might be made.'

The UK firm on Monday confirmed it had recommended a £6.3bn offer from US investment fund Fortress, the owner of Majestic Wine. Morrisons has already rejected a bid from yet another US buyout firm Clayton, Dubilier & Rice.

“It's clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons. This, together with the very clear intentions they have set out today, has given the Morrisons directors confidence that Fortress will support and accelerate our plans to develop and strengthen Morrisons further,” said Morrisons chairman Andrew Higginson.

"The Morrisons directors believe that the offer represents a fair and recommendable price for shareholders which recognises Morrisons' future prospects.

Morrisons, which operates 500 stores and employs about 118,000 staff in the UK, on Saturday said it would sell to a Fortress-led consortium which includes the controversial Koch family.

Fortress and its partners will take on debt worth £3.2bn. The consortium and Morrisons settled on a total value of 252p a share and a 2p cash dividend after months of talks.