Minister to meet Morrisons management over buyout

Business secretary Kwasi Kwarteng plans to meet with Morrisons executives to seek assurances over a potential US takeover.

A consortium, led by private equity firm Fortress, agreed a £6.3 billion buyout deal on the weekend.

Kwarteng will ask to meet with the Big 4 grocer’s chairman, Andrew Higginson, in the coming weeks to discuss jobs, pensions, and its UK operations.

The minister did not comment on his request but told the Financial Times he was “monitoring the situation”.

READ MOREMorrisons should sell for £6.5bn, shareholder says

“Morrisons is a historic brand name and [I am] very interested in seeing how the situation develops,” he continued.

“We need to assess what’s going on before making rush judgments. 

“You have to look at behaviour, specifics and track record and see that certain safeguards are kept.”

Fortress, which is based in New York and manages $53 billion in assets, had pledged to avoid a “major” sale and leaseback exercise of Morrisons stores and warehouses.

The supermarket is seen as an attractive asset because it owns 87 per cent of its freeholds.

Writing to Kwarteng on Saturday, Fortress managing partner Josh Pack claimed the firm was “acutely aware of the wider responsibilities that come with […] Morrisons’ history, culture and importance to the British public”.

“I want to reassure you that we fully intend to be a supportive and responsible owner of Morrisons, should we complete the transaction successfully,” he added.

Pack committed to maintaining Morrisons’ headquarters in Bradford, safeguarding pensions, and maintaining the staff minimum wage of £10.

“We are committed to ensuring that the UK remains open for business, while protecting the livelihoods of British workers and investment,” a government spokesperson told The Telegraph.

“The Government recognises that overseas investors play a major and positive role in stimulating economic growth in every part of the UK. 

“In most cases, it is right that mergers are treated as a commercial matter for the parties involved.”

The news comes after Legal and General, a Morrisons shareholder, appeared to criticise the private equity bid by warning the supermarket could be taken over for the “wrong reasons”.

Buyers might plan to take advantage of its undervalued property portfolio, the investment company claimed.

Morrisons has priced its properties at £5.87 billion, but some analysts believe they could be worth up to £9 billion.



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