Shares in supermarket group Morrisons have surged by more than 30% after it rebuffed a takeover off worth more than £5.5bn.
The rise, which comes after Sky News this weekend revealed details of the offer from US buyout giant Clayton Dubilier & Rice (CD&R), added more than £1bn to the group’s market value.
Rivals Sainsbury’s and Tesco also rose, adding 4% and 2% respectively, as investors digested the implications of the approach for the wider supermarket sector.
Shares jumped on Monday after details of the takeover approach were confirmed at the weekend
On Saturday, Morrisons confirmed the approach, at 230p a share, but said that “significantly undervalued Morrisons and its future prospects” and that it had rejected the offer last week.
But the Financial Times reported that CD&R was set to push ahead with its pursuit while there was also speculation that the offer could spark a bidding war with other private equity firms – or Amazon, which already has an online partnership with the supermarket.
The stock had closed at just over 178p – giving it a market value of just over £4.3bn – at the close of trading on Friday.
On Monday it climbed to more than 236p in early trading, taking the value to more than £5.7bn.
Nick Bubb, an independent retail analyst, said: “As noted by the FT today, CD&R aren’t going away and we suspect a deal can be done in the 250p-260p area, so it should be a lively day for the sector on the stock market today, with an additional focus on the bid potential for Sainsbury and Tesco as well.”