Morrisons bidder does deal over pensions

ONE of the private equity firms trying to buy Morrisons has struck a deal with the supermarket’s pension scheme.

Clayton Dubilier & Rice has said it would ensure the retirement pot would be among ‘the best funded and best supported in the UK’.

It has pledged to put down further properties as collateral for the scheme if it wins the bid battle for Morrisons and to support plans for a member buyout within a decade.

The Morrisons scheme is in surplus but trustees had raised concerns that a debt-fuelled takeover could result in other creditors getting preference on assets if the business later ran into trouble.

But chairman of scheme trustees Steve Southern said: ‘CD&R has been proactive in its engagement… delivering a positive outcome for all members of Morrisons’ pension schemes.’

CD&R and private equity firm Fortress are fighting to buy Morrisons, in a contest that looks likely to be settled by an auction this month.

At the moment, a £7bn bid from CD&R is preferred by Morrisons, after Fortress and a consortium bid £6.7bn. However it could still be trumped in the auction.

The Morrisons retirement saver plan and the Safeway pension scheme look after the retirement pots of around 85,500 current and former staff. Both are well-funded, and are almost £700m in surplus. Trustees hope to get the pension schemes to a ‘buy-out’ deficit within the next ten years.

However, pensions consultant John Ralfe said CD&R should be paying ‘a big dollop of cash’ instead of providing property guarantees, adding: ‘Trustees should be demanding this.’