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Supermarket battle

Private equity firm CD&R wins £7bn Morrisons battle


Morrisons leaves the stock market for US ownership

US private equity company Clayton, Dubilier & Rice (CD&R) has won the battle to acquire supermarket chain Morrisons after outbidding rival Fortress in an auction process.

CD&R bid 287p a share, valuing the Bradford-based business at almost £7 billion. The Takeover Panel said Fortress offered 286p per share.

Shareholders will vote on the final offer on 19 October. While there is no guarantee the highest offer will prevail, CD&R had already gained the support of the Morrisons board, having promised that the company’s head office would remain in Bradford and confirmed there were no plans to sell off its store estate to raise cash.

Morrisons’ pension trustees will have to be consulted, although earlier this month they said an agreement had been reached with CD&R, which has been advised by the former Tesco chief executive Sir Terry Leahy.

Seema Malhotra, shadow minister for business and consumers, said: “The new owners must urgently deliver binding assurances for workers, pension fund holders, and local people.

“Government has a responsibility too. It must ensure that the new owners are responsible, long-term investors, seeking to build the business for the future, and that decisions taken are also in the public interest.

“We cannot see a repetition of previous cases where businesses have been loaded with debt and asset-stripped. Morrisons is a great British company which must be safeguarded for the future.”

Joanne McGuinness, Usdaw national officer, said: “Now that the future ownership of Morrisons seems clearer we are seeking discussions with the prospective new owners, to ensure that our members’ interests and the long-term future of the business are protected throughout this process.

“Our main concerns are about job security, while maintaining and improving our members’ terms and conditions of employment.

“We have heard the assurances already given and welcome the constructive working relationship that Usdaw has experienced so far.”

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