Labour warns against ‘dodgy’ Morrisons takeover

Thousands of jobs could be lost if Morrisons is bought by a US private equity firm, the Labour party has warned.

The Big 4 grocer, which employs 120,000 people, received a takeover bid from New York-based Clayton, Dubilier and Rice.

Although Morrisons rejected the proposal for “significantly” undervaluing the business, the investment company confirmed it was “considering a possible cash offer”.

Another takeover offer has to take place within 28 days under City rules.

READ MOREMorrisons brings back glass milk bottles to 11 stores

Shadow business minister Seema Maholtra called for an end to “dodgy private equity firms” that “load the companies with debt and leave while pocketing the dividends”.

“Our supermarkets that play a role at the heart of our communities need owners that put the long-term interests of the business and its employees first,” she said.

“When Debenhams went bust we saw private equity firms walk away while employees lost their jobs and staff who have paid into the pension scheme were left out of pocket.”

A recent report into Debenhams’ collapse, which saw 12,000 jobs wiped out, concluded that the business “never recovered from private equity ownership”.

Morrisons shares leapt by 32.6 per cent when markets opened this morning.

The increase is roughly in line with Clayton, Dubilier and Rice’s pricing of the shares at 230p, a 29 per cent premium on the 178p closing price last Friday.

Big 4 rivals also seem to have benefitted from investor interest, with Sainsbury’s shares up 4.4 per cent to 271.6p and Tesco up 2.8 per cent to 228p.

The news comes after the billionaire Issa brothers and private equity firm TDR saw their £6.8 billion buyout of Asda cleared by the Competition and Markets Authority.

FinanceSupermarkets

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