British supermarket Morrisons has agreed to a takeover offer worth £7 billion ($9.54bn) from US private equity group Clayton, Dubilier & Rice.
Morrisons dropped its recommendation of a lower bid from a consortium led by Fortress Investment Group.
Morrisons, which started out as an egg and butter merchant in 1899, said CD&R's offer was worth 285 pence a share, trumping a 272 pence a share offer, worth £6.7bn, from the group led by SoftBank-owned Fortress.
CD&R's offer gives the supermarket chain an enterprise value of £9.7bn when debt is included.
Morrisons' board intends to recommend it unanimously.
The battle for Britain's fourth-largest grocer – after Tesco, Sainsbury's and Asda – is the most high-profile looming takeover and reflects private equity's appetite for UK companies.
CD&R's agreed bid represents a 60 per cent premium to Morrisons' share price before takeover interest emerged in mid-June.
Morrisons' shares closed on Thursday at 279.2 pence, indicating investors expected a higher offer.
CD&R, which has former Tesco boss Terry Leahy as a senior adviser, had a £5.52bn proposal rejected by the company on June 17.
Morrisons later recommended the bid from Fortress worth £6.3bn, which was then raised after major shareholders, including Silchester, M&G and Hambro, indicated they wanted more.
CD&R has committed to retain the management team led by chief executive David Potts, and its strategy.
It said material store sale and leaseback transactions were not planned.
"The Morrisons board believes that the offer from CD&R represents good value for shareholders while at the same time protecting the fundamental character of Morrisons for all stakeholders," said chairman Andrew Higginson.
Mr Potts, Mr Higginson and Morrisons' chief operating officer Trevor Strain all worked with Mr Leahy at Tesco.
"CD&R is delighted to have the opportunity to support the management of Morrisons in executing their strategy to grow and develop the business," Mr Leahy said.
CD&R's current investments include Motor Fuel Group, which operates 918 petrol forecourts in the UK.
With Morrisons owning 339 forecourts, CD&R is aiming for a partnership to develop Morrisons' wholesale business and convenience store portfolio.
But the forecourt overlap will probably face scrutiny from Britain's competition regulator.
Morrisons shareholders will vote on CD&R's offer at meetings expected around the week starting on October 4.
Under British takeover rules, Fortress could come back with a higher offer. It said it was "considering its options" and urged shareholders to take no action.
Analysts have speculated that Amazon, which has a partnership deal with Morrisons, could still enter the fray, although most believe it would have done so by now if it were interested.
