Morrisons To Become Private Company Next Week After CD&R’s Takeover Bid Wins Backing From Shareholders

Namnews, 20th October 2021

Shareholders in Morrisons yesterday approved CD&R’s £7.1bn takeover offer, bringing the curtain down on a fiercely contested battle for the UK’s fourth-largest grocer.

Despite a last-ditch rebellion from some smaller independent shareholders, strong backing from institutional investors ensured the deal secured approval from 99.2% of shares voted, well over the 75% required level.

The deal will put Morrisons into private hands for the first time since the founding family listed it on the stock market in 1967.

Unions and politicians have been anxious about what a private equity takeover will mean for Morrisons, with concerns raised that the business could be stripped of its valuable property holdings and loaded up with debt. CD&R’s pre-auction offer had promised that the retailer’s head office would remain in Bradford, staff pay rates would be protected, and there were no plans to sell off its store estate to raise cash. However, these commitments are not legally binding.

Andrew Higginson, the chairman of Morrisons, said yesterday: “We remain confident that CD&R will be a responsible, thoughtful and careful owner of Morrisons and we will now move forward with the remaining steps in the acquisition process.”

Sir Terry Leahy, the former CEO of Tesco who is a senior adviser to CD&R, added: “The particular heritage, culture and operating model of Morrisons are key features of the company and we will be very mindful of these during our tenure as owners. We very much look forward to working with the Morrisons team, not just to preserve the company’s many strengths – but to build on these, with innovation, capital and new technology – helping the business realise its full potential and delivering for all of its stakeholders.”

Reports have suggested that Sir Terry will be appointed chairman of Morrisons in the near future. This will reunite him with his former Tesco employees David Potts, who has been Chief Executive of Morrisons for more than six years, and Trevor Strain, the Chief Operating Officer who joined Morrisons from Tesco in 2009.

Potts, who orchestrated the turnaround in the Morrisons’ fortunes during his time in charge, will make more than £10m from selling his shares to CD&R.

CD&R’s bid requires final approval in court next week before the private equity firm takes control on 27 October, the day after Morrisons exits the stock market.

The Competition and Markets Authority (CMA) will continue to examine the deal to evaluate if there are any competition issues, with CD&R’s ownership of forecourt operator MFG seen as a possible issue if combined with the Morrisons petrol station estate.