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Britain’s Morrisons agrees $8.7 bln offer from Fortress-led group

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A Morrisons store is pictured in St Albans, Britain, September 10, 2020. REUTERS/Peter Cziborra//File Photo

  • Fortress-led group offers 254 pence a share
  • Tops CD&R’s proposal of 230 pence
  • Some investors want 270 pence
  • Morrisons says Fortress would be suitable owner
  • Fortress says it will be ‘good steward’

LONDON, July 3 (Reuters) – Morrisons has agreed to a takeover led by SoftBank (9984.T) owned Fortress Investment Group, valuing Britain’s fourth largest supermarket chain at 6.3 billion pounds ($8.7 billion) and topping a rival proposal from a U.S. private equity firm.

The offer from Fortress, along with Canada Pension Plan Investment Board and Koch Real Estate Investments, exceeds a 5.52 billion pound unsolicited proposal from Clayton, Dubilier & Rice (CD&R), which Morrisons (MRW.L) rejected on June 19. read more

Including Morrisons’ net debt of 3.2 billion pounds, Fortress’ offer gives the group an enterprise value of 9.5 billion pounds.

“We have looked very carefully at Fortress’ approach, their plans for the business and their overall suitability as an owner of a unique British food-maker and shopkeeper with over 110,000 colleagues and an important role in British food production and farming,” said Morrisons Chairman Andrew Higginson.

“It’s clear to us that Fortress has a full understanding and appreciation of the fundamental character of Morrisons.”

The Fortress deal underlines the growing appetite from private funds for British supermarket groups, seen as attractive because of their cash generation and freehold assets.

Fortress, an independently-operated subsidiary of Japan’s SoftBank Group Corp, is a global investment manager with about $53 billion in assets under management as of March. It purchased British wine seller Majestic Wine in 2019.

“We are committed to being good stewards of Morrisons to best serve its stakeholder groups, and the wider British public, for the long term,” said managing partner, Joshua A. Pack.

Fortress intends to retain Morrisons’ existing management team led by CEO David Potts and execute its existing strategy. It said it was not planning any material store sale and leaseback transactions.

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Under the terms of the deal, which Morrisons’ board is recommending to shareholders, investors would receive 254 pence a share, comprising 252 pence in cash and a 2 pence special cash dividend. CD&R’s proposal was 230 pence a share, worth 5.52 billion pounds.

Last week JO Hambro, a top ten shareholder in Morrisons, said any suitor for the group should offer about 270 pence a share or 6.5 billion pounds. read more

Morrisons, based in Bradford, northern England, started out as an egg and butter merchant in 1899. It now only trails market leader Tesco (TSCO.L), Sainsbury’s (SBRY.L) and Asda in annual sales.

Morrisons owns 85% of its nearly 500 stores and has 19 mostly freehold manufacturing sites. It is unique among British supermarkets in making over half of the fresh food it sells.

It said the Fortress offer represented a premium of 42% to its closing share price of 178 pence on June 18 – the day before CD&R’s proposal. The stock closed at 243 pence on Friday.

Morrisons’ directors, who own 0.23% of the group’s equity, would make 14.3 million pounds from selling their shares to Fortress.

CD&R, which under British takeover rules has until July 17 to come back with a firm offer, had no immediate comment.

Morrisons has a partnership agreement with Amazon (AMZN.O) and there has been speculation it too could emerge as a possible bidder.

FIVE PROPOSALS

Morrisons said an initial unsolicited proposal was received from Fortress on May 4 at 220 pence a share. This offer was not made public. Fortress then made four subsequent proposals before it offered a total value of 254 a share on June 5.

The bids for Morrisons follow February’s purchase by Zuber and Mohsin Issa and private equity firm TDR Capital of a majority stake in Asda from Walmart (WMT.N). The deal valued Asda at 6.8 billion pounds. read more

That transaction followed Sainsbury’s failure to take over Asda after an agreed deal was blocked by Britain’s competition regulator in 2019.

In April, Czech billionaire Daniel Kretinsky raised his stake in Sainsbury’s to almost 10%, igniting bid speculation.

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($1 = 0.7235 pounds)

Reporting by James Davey; Editing by Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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World

India’s Bharat Biotech says vaccine 93.4% effective against severe COVID-19

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July 3 (Reuters) – Phase-III trials of a vaccine made by India’s Bharat Biotech showed it was 93.4% effective against severe symptomatic COVID-19, the firm said on Saturday, a finding that could boost people’s acceptance of Covaxin.

The data demonstrated 65.2% protection against the Delta variant, first identified in India, that led to a surge in infections in April and May, and the world’s highest daily death tolls.

India’s homegrown vaccine also showed effectiveness of 77.8% against symptomatic COVID-19 in the trial.

Last month, vaccine maker AstraZeneca Plc (AZN.L) also said its vaccine was effective against the Delta and Kappa variants, citing a study.

India has been administering the AstraZeneca vaccine, made domestically by the Serum Institute of India, which said last month it planned to step up monthly production from July, to nearly 100 million doses.

Bharat Biotech now estimates it will make 23 million doses a month.

The Phase-III data came as Ocugen Inc (OCGN.O), which is co-developing Covaxin with Bharat Biotech for the U.S. market, prepares to file a request for full U.S. approval.

India, with a tally of 30.45 million infections, is the second most affected nation after the United States, with 33 million. The south Asian nation’s death toll has now crossed 400,000.

Reporting by Maria Ponnezhath in Bengaluru; Editing by Clarence Fernandez

Our Standards: The Thomson Reuters Trust Principles.

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World

France probes fashion retailers for concealing ‘crimes against humanity’ in Xinjiang

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Customers enter a Zara shop in Nantes as non-essential business re-open after closing down for months, amid the coronavirus disease (COVID-19) outbreak in France, May 19, 2021. REUTERS/Stephane Mahe/File Photo

PARIS, July 1 (Reuters) – French prosecutors have opened an investigation into four fashion retailers suspected of concealing “crimes against humanity” in China’s Xinjiang region, a judicial source said on Thursday.

The procedure is linked to accusations against China over its treatment of minority Muslim Uyghurs in the region, including the use of forced labour, the source said.

China denies all accusations of abuse in the region.

The source told Reuters Uniqlo France, a unit of Japan’s Fast Retailing (9983.T), Zara owner Inditex (ITX.MC), France’s SMCP (SMCP.PA) and Skechers (SKX.N) were the subject of the investigation, confirming a report by French media website Mediapart.

“An investigation has been opened by the crimes against humanity unit within the antiterrorism prosecutor’s office following the filing of a complaint,” the source said.

France has a Central Office to Fight Crimes against Humanity, Genocide and War Crimes, founded in 2013.

Inditex said it rejected the claims in the legal complaint, adding that it conducted rigorous traceability controls and would fully cooperate with the French investigation.

“At Inditex, we have zero tolerance for all forms of forced labour and have established policies and procedures to ensure this practice does not take place in our supply chain,” the company said in a statement.

SMCP said it would cooperate with the French authorities to prove the allegations false.

“SMCP works with suppliers located all over the world and maintains that it does not have direct suppliers in the region mentioned in the press,” SMCP said, adding that it regularly audited its suppliers.

Fast Retailing said in a statement from Tokyo that it had not been contacted by French authorities and that none of its production partners are located in Xinjiang.

“If and when notified, we will cooperate fully with the investigation to reaffirm there is no forced labour in our supply chains,” it said.

The company lost an appeal with United States Customs in May after a shipment of Uniqlo men’s shirts were impounded because of suspected violations of a ban on Xinjiang cotton. read more

Skechers said it does not comment on pending litigation. It referred Reuters to a March 2021 statement in which it said it maintained a strict supplier code of conduct.

Two nongovernmental organisations (NGOs) filed a complaint in France in early April against multinationals for concealment of forced labour and crimes against humanity.

United Nations experts and rights groups estimate over a million people, mainly Uyghurs and other Muslim minorities, have been detained in recent years in a vast system of camps in China’s western Xinjiang region.

Many former inmates have said they were subject to ideological training and abuse. Rights groups say the camps have been used as a source of low-paid and coercive labour.

China initially denied the camps existed, but has since said they are vocational centres designed to combat extremism. In late 2019, China said all people in the camps had “graduated.”

Several Western brands including H&M (HMb.ST), Burberry (BRBY.L) and Nike (NKE.N) have been hit by consumer boycotts in China after raising concerns about reports of forced labour in Xinjiang. read more

In March, the United States, the European Union, Britain and Canada imposed sanctions on Chinese officials, citing human rights abuses in Xinjiang. Beijing retaliated immediately with its own punitive measures. read more

Human Rights Watch this year documented what it said could constitute crimes against humanity being committed in Xinjiang.

Reporting by Benoit Van Overstraeten in Paris
Additional reporting by Richard Lough in Paris, Jesus Aguado in Madrid and Rocky Swift in Tokyo.
Editing by Kirsten Donovan and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

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Business

CureVac COVID-19 vaccine records only 48% efficacy in final trial readout

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A dose of CureVac vaccine or a placebo is seen during a study by the German biotech firm CureVac as part of a testing for a new vaccine against the coronavirus disease (COVID-19), in Brussels, Belgium March 2, 2021. REUTERS/Yves Herman

June 30 (Reuters) – CureVac (5CV.DE) said its COVID-19 vaccine was 48% effective in the final analysis of its pivotal mass trial, only marginally better than the 47% reported after an initial read-out two weeks ago.

The German biotech firm said that efficacy, measured by preventing symptomatic disease, was slightly better at 53% when excluding trial participants older than 60 years, an age group that is by far the most severely affected.

CureVac said on June 16 its COVID-19 vaccine, known as CVnCoV, proved only 47% effective in an initial trial read-out and that new variants had proved a headwind, denting investor confidence in its ability to take on rival shots.

That wiped billions of euros from its market value.

Wednesday’s news sent U.S.-listed shares of the company 10.2% lower to $66 after the bell.

Late-stage trials of BioNTech/Pfizer (22UAy.DE), (PFE.N) and Moderna (MRNA.O) vaccines, which like CureVac’s are based on mRNA technology, had efficacy rates of well above 90% across all age groups but took place when the original version of the coronavirus was dominant.

Data on their products have, however, so far suggested only somewhat weaker protection against new variants.

The CureVac study, which involved about 40,000 adult volunteers in Europe and Latin America, showed that efficacy was 77% in the age group below 60 years of age when considering only moderate to severe symptoms and excluding mild cases.

CureVac said it had sent the data to the European Medicines Agency (EMA) as part of an ongoing dialogue with the EU drugs regulator.

CureVac previously said that the regulatory hurdle was 50% efficacy in principle but that various other considerations would come into play.

“In this final analysis, CVnCoV demonstrates a strong public health value in fully protecting study participants in the age group of 18 to 60 against hospitalization and death and 77% against moderate and severe disease – an efficacy profile, which we believe will be an important contribution to help manage the COVID-19 pandemic and the dynamic variant spread,” said Chief Executive Officer Franz-Werner Haas.

CureVac had registered 228 infections overall for the final analysis, after 134 cases for the interim analysis.

Public health representatives across the globe are pushing for a fast deployment of available vaccines to counter highly contagious mutations of COVID-19 such as the Delta variant that first emerged in India.

The EMA has said it would not impose a 50% efficacy threshold for vaccines and that full trial data was necessary for it to make a sound assessment on the benefits and risks of a shot. read more

Under CureVac’s only major supply deal for the product tested in the trial, the European Union secured up to 405 million doses of the vaccine in November, of which 180 million are optional.

In a bet on CureVac’s technology, Britain placed a conditional 50 million dose order in February on yet-to-be-developed vaccines that build on the product tested in the trial. read more

CureVac had lined up a network of manufacturing partners including Celonic Group of Switzerland, Novartis (NOVN.S), Bayer (BAYGn.DE), Fareva, Wacker (WCHG.DE) and Rentschler Biopharma SE.

($1 = 0.8377 euros)

Reporting by Ludwig Burger, Editing by Rosalba O’Brien

Our Standards: The Thomson Reuters Trust Principles.

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World

Brazil to suspend Indian COVID-19 vaccine deal as graft claims probed

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RIO DE JANEIRO, June 29 (Reuters) – Brazil will suspend a $324-million contract for COVID-19 vaccine from India that has mired President Jair Bolsonaro in accusations of irregularities, the health minister said on Tuesday, following guidance by the federal comptroller, the CGU.

The deal to buy 20 million doses of Bharat Biotech’s Covaxin shot has become a headache for Bolsonaro after whistleblowers went public with alleged irregularities. One health ministry official said he alerted the president about his concerns.

Bolsonaro, whose popularity has faded as Brazil’s COVID-19 death toll climbed past 500,000, has denied any wrongdoing, saying on Monday he was not aware of any irregularities.

But thorny questions persist, and may pose problems for him ahead of next year’s presidential vote.

Health Minister Marcelo Queiroga told a news conference his team would investigate the accusations during the suspension.

“According to the preliminary analysis of the CGU, there are no irregularities in the contract but, for compliance, the health ministry chose to suspend the contract,” the ministry said in a statement.

CNN Brasil had earlier reported that the ministry had decided to cancel the contract.

Brazilian federal prosecutors have opened an investigation, citing comparatively high prices of about $15 a dose, quick talks and pending regulatory approvals as red flags.

In a statement, Bharat Biotech said it had followed a “step-by-step” approach for the regulatory approval and supply contract of its vaccine in Brazil, and had not received advance payments from the health ministry.

It added that the pricing of Covaxin had been set between $15 and $20 a dose for supplies to governments outside India.

The deal is also being probed by a Senate panel investigating Brazil’s handling of the pandemic.

One leading opposition senator on the panel, Randolfe Rodrigues, filed a formal criminal complaint against Bolsonaro with the Supreme Court on Monday.

He asked the court to investigate why Bolsonaro “did not take any action after being notified of the existence of a giant corruption scheme in the Health Ministry.”

($1=4.9403 reais)

Reporting by Gabriel Stargardter and Pedro Fonseca; Additional reporting by Uday Sampath in Bengaluru; Editing by Bill Berkrot and Clarence Fernandez

Our Standards: The Thomson Reuters Trust Principles.

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