By Adria Calatayud
Apollo Global Management Inc. said Tuesday that it is in talks with SoftBank Group Corp.'s Fortress Investment Group LLC to join a consortium bidding for U.K. grocer Wm. Morrison Supermarkets PLC, and ruled out a rival offer.
New York-based Apollo said its preliminary discussions with Fortress--which led a group of investors that earlier this month agreed to buy Morrisons for 6.3 billion pounds ($8.62 billion)--may result in funds managed or advised by Apollo forming part of the consortium.
As a result, Apollo said it doesn't plan to make a separate offer for Morrisons.
On July 5, Apollo said it was considering making a bid for the U.K. grocer. That move came two days after the Fortress-led consortium agreed to buy Morrisons, and fueled hopes for a three-way bidding fight among Apollo, Fortress and U.S. private-equity firm Clayton Dubilier & Rice LLC, which in June made an approach for Morrisons that was rejected by the grocer's board.
Shares in Morrisons on Monday closed at GBP2.62 apiece, above the price in the offer from the Fortress-led consortium, suggesting that investors anticipated a higher bid. The all-cash offer from the Fortress-led consortium valued Morrisons at GBP2.54 a share, including a two-pence special dividend.
New York-based Fortress joined forces with the Canadian Pension Plan Investment Board and the real-estate arm of Koch Industries, a private conglomerate headed by billionaire Charles Koch, in its offer for Morrisons. At the time, the consortium said that it would support Morrisons management's existing strategy and that it didn't plan to launch any material store sale-and-leaseback deals.
Apollo said it would be fully supportive of Fortress's intentions regarding Morrisons, if their discussions lead to a deal.
There can be no certainty that an agreement will be reached, Apollo said.
Write to Adria Calatayud at firstname.lastname@example.org
(END) Dow Jones Newswires