L&G in U-turn as it backs swoop on grocer

MORRISONS moved a step closer to falling into the hands of private equity after the UK’s biggest fund manager gave Clayton Dubilier & Rice (CD&R) the green light.

Legal & General had been a fierce critic of CD&R and in June said the private equity firm ‘would not be adding any value’ to the supermarket.

A month later Legal & General also warned ‘it is important that Morrisons isn’t taken over for the wrong reasons’. The firm had been concerned that CD&R would buy Morrisons and quickly selloff the company’s property assets. But in a U-turn yesterday Legal & General said it was backing last week’s £7bn offer from CD&R.

Andrew Koch, senior fund manager at Legal & General, said: ‘A significant concern has been the lack of disclosure around the value of the property portfolio. With more competitive bids being made, the bidding parties will have paid close attention to this during their due diligence.

‘This gives us some comfort that the true value should be realised for shareholders.’