The chairman of the Commons business committee has written to the competition watchdog after a US private equity firm attempted to buy Morrisons.
Labour MP Darren Jones said that “previous highly leveraged purchases of high street brands” had led to “administration, job losses and pension fund shortfalls”.
“There is concern that regulatory bodies have insufficient oversight or powers to intervene when new owners act irresponsibly,” he continued.
“British supermarkets are the latest area of interest for private equity and other buyers using significant amounts of debt.”
READ MORE: Morrisons should sell for £6.5bn, shareholder says
“Some stakeholders have raised concerns about what this might mean for the protection of jobs, pension funds and supermarkets’ presence on British high streets.”
Legal and General, Morrisons’ 11th-largest shareholder, warned last month that potential buyer Clayton, Dubilier and Rice would not bring any “genuine value”.
The £5.5 billion bid followed Asda’s £6.8 billion takeover by the Issa brothers and TDR Capital, a buyout firm, which was financed with just £800 million of equity.
Shadow business minister Seema Maholtra has argued Morrisons could end up like the collapsed clothing giant Debenhams.
“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,” she warned.
A recent report into Debenhams’ closure, which saw 12,000 jobs wiped out, concluded that the business “never recovered from private equity ownership”.
Clayton, Dubilier and Rice has until July 17 to improve its offer.
Rival bidders, which may include Amazon and the private equity firms Apollo and Lone Star, are thought to be waiting for its next move.
Morrisons is an attractive asset because it owns 85 per cent of its freeholds, generates billions of pounds of cash to service debt and has proved resilient during the Covid-19 pandemic.
Shares in the supermarket have surged since the multi-billion bid, currently standing at 241p.