It came after Sky News reported earlier the approach of one of the world’s largest buyout companies, Clayton Dubilier & Rice (CD&R).
In a statement, the supermarket chain said, “The board of directors of Morrisons evaluated the conditional proposal with its financial advisor, Rothschild & Co, and unanimously concluded that the conditional proposal significantly undervalues Morrisons and its future prospects.
“As a result, the board of directors rejected the conditional proposal on June 17, 2021.”
Morrisons said the conditional cash offer of 230 pence per share valued it at just over £ 5.5 billion.
CD&R has confirmed that it “is considering a possible cash offer” and, under UK takeover rules, has until July 17 to announce a firm intention to make an offer.
However, he added that there was “no certainty that an offer will be made”.
Sky’s City editor-in-chief Mark Kleinman has reportedly started contacting banks to fund a potential bid for Morrisons.
CD & R’s interest in the chain isn’t the first time a potential buyer has considered an offer for Morrisons, Kleinman added.
Amazon has been rumored several times as a suitor, with Morrisons being established as a food supplier for the online giant’s Prime Now and Pantry customers.
With a workforce of around 110,000, Morrisons is one of the largest private sector employers in Britain and has a market share of just over 10%.
It is the UK’s fourth-largest supermarket company, behind third-third Asda’s 14.4% share.
He said last month that sales in the 14 weeks leading up to May 9 were up 2.7% like-for-like, excluding fuel, including a 113% increase in online sales.
Earlier this month, Morrisons was also at the reception of one of the biggest shareholder revolts in British corporate history when 70% of investors voted against its pandemic compensation packages.