Morrisons a step closer to buyout
SUPERMARKET giant Morrisons could soon be in foreign ownership for the first time in its 122-year history.
US private equity firm Clayton Dubilier & Rice won an auction to take control of Britain’s fourth largest grocer with a £7billion bid.
The 287 pence-per-share proposal narrowly beat a rival submission from Fortress Investment Group, which had offered 286p per share.
If its shareholders approve, CD&R could complete its takeover by the end of this month.
That would make Morrisons the second supermarket chain this year to be acquired by private equity after a buyout of Asda, the third biggest grocer, in February. On that occasion, UK billionaire brothers Zuber and Mohsin Issa, acquired Asda with TDR Capital from US retail giantwalmart.
After the winning bid for Morrisons was revealed yesterday, shop workers’ union Usdaw called for urgent talks with both its existing management and that of CD&R to ensure both jobs and the business are protected.
An Usdaw spokesman said: “We’ll be seeking meetings with the new owners and Morrisons as we want assurances on jobs and to continue our relationship with the company.”
The union fears jobs could be lost and parts of the business mortgaged, sold off, or both, to help finance the takeover. The winning bid was led by
former Tesco chief executive Sir Terry Leahy with a promise to invest.
A spokesman for CD&R said it was pleased to have won the auction and looked forward to working with the Morrisons management team. Under chief executive Dave Potts, Morrisons has fought back from years of falling sales, profits and market share.
The retail giant now has almost 500 stores and 9.8 per cent of the market. Tesco leads the way with a
28.3 per cent share. The Morrisons takeover battle has been running since May and reflects the continued appeal of British companies for private equity.
Joshua Pack, managing partner of Fortress, which narrowly lost out in the auction, said: “Morrisons is an outstanding business and we wish the company the very best for the future.”