MPs balk at Morrisons takeover by US firm

MPs are set to intervene in a potential Morrisons takeover after the Big 4 grocer rejected a multi-billion offer from a New York private equity firm.

According to The Telegraph, the Business, Energy and Industrial Strategy Committee is drafting a letter to the competition watchdog seeking assurances following the buyout proposal from Clayton, Dubilier and Rice.

It comes after Labour warned that “dodgy private equity firms” could leave the grocer like Debenhams, which collapsed last year and wiped out 12,000 jobs.

“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,” shadow business minister Seema Maholtra said.

READ MOREMorrisons lagging behind rivals on healthy food

Morrisons, which employs 118,000 people, has also announced it will seek assurances over the future of its workforce, manufacturing and pensions in a takeover deal.

It rejected Clayton, Dubilier and Rice’s £5.5 billion offer for “significantly” undervaluing the company, which priced shares at 230p.

The firm may return with a sweetened offer by July 17, though its move may spur rival offers as well.

A retail analyst told The Times that Morrisons would be under pressure from the City to engage with a 245p-a-share bid, and that investors would probably support a deal around 275p.

A takeover at 230p would have left Morrisons chief executive David Potts with a £17.6 million payday.

The supermarket boss recently saw his £1.7 million bonus rejected by shareholders, angered at Potts being awarded the full amount while the grocer’s profits were cut in half over 2020.

Chief operating officer Trevor Strain and chief financial officer Michael Gleeson would have banked £10.3 million and £1.4 million respectively.

Morrisons shares dipped slightly after a dramatic increase when markets opened yesterday, trading at 237p.

FinanceSupermarkets

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