The supermarket chain’s board has backed a new £7 billion offer from US private equity firm Clayton Dubilier & Rice (CD&R), after turning down the company’s original £5.5 billion bid in June.

Earlier this month Morrisons accepted a £6.7 billion offer from a consortium led by Fortress Investment Group – an improvement on its own successful original bid of £6.3 billion – but the board has now unanimously approved CD&R’s new offer, which will be voted on by shareholders in October.

The Morrisons directors considered the new offer, which represents a 60% premium to Morrisons’ share price before news of takeover interest was made public in June, to be “fair and reasonable”.

Andrew Higginson, chair of Morrisons, said: “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.

“CD&R have a strong record of developing, strengthening and growing the businesses that they invest in and they share our vision for Morrisons’ future. This, together with the strong set of intentions that they have set out today, gives the Morrisons Board confidence that CD&R will be a responsible, thoughtful and careful owner of an important British grocery business.”

Sir Terry Leahy, senior adviser to CD&R funds, said: “The grocery sector in the UK is undergoing great change and we believe Morrisons is well placed, with CD&R’s support, to succeed in this environment. CD&R values Morrisons’ distinctive business model and is committed to supporting it, including the successful ESG and broader stakeholder engagement strategies of the company that are essential to its continued success.”

Fortress has stated that Morrisons’ shareholders should “take no action” over the CD&R offer and that the consortium is “considering its options.”