Morrisons defends its private equity takeover amid calls for Parliament to scrutinise the £6.3bn deal
Morrisons last night sought to head off political opposition to a private equity takeover of the supermarket amid calls for Parliament to scrutinise the £6.3billion deal.
In a letter to government ministers and MPs in constituencies where it is a top employer, the grocer claimed that buyout firm Fortress and its backers would be ‘good stewards’ of the business.
It listed undertakings the consortium has given on pay, suppliers and properties, despite questions about how binding these will actually be and for how long.
Assurances: Morrisons has told the government that buyout firm Fortress and its backers would be ‘good stewards’ of the business
‘Given all these assurances, the Morrisons board believes that Fortress would be a suitable and responsible owner,’ it said.
The move came the day after it emerged Kwasi Kwarteng, the Business Secretary, was ‘monitoring’ the deal and seeking a meeting with the board. But there were calls yesterday for the House of Commons business committee, chaired by Labour’s Darren Jones, to probe the takeover.
Former Tory environment minister Lord Blencathra warned that Morrisons was ‘ripe for asset-stripping’ and called for MPs to investigate, while trade union Unite called for the implications for the food industry to be scrutinised.
Jones has so far asked the Competition and Markets Authority to explain what powers it may have to intervene in the deal. But Lord Blencathra, who served in the governments of John Major and Margaret Thatcher, said executives from Morrisons and its potential buyers should be hauled into Parliament as part of a wider inquiry into private equity’s raid on UK plc.
The Tory peer said: ‘You can just imagine how vulture capitalists might sell it all off and then lease it back at enormous cost.
‘We are seeing this now across the board with British business and this is the second supermarket to be targeted by private equity.
They are only interested in maximising profits. There needs to be an inquiry into what vulture firms are doing to this country, so that we can actually get some perspective on what parts of British industry we are losing.’
Unite national officer Adrian Jones added: ‘It is entirely proper and correct for MPs on the business committee to demand answers and secure strict guarantees from the existing management and potential bidders about what is being offered and the impact on directly employed workers and those in the company’s supply chain.’
It came as it was claimed Morrisons’ property portfolio – listed as being worth £5.8bn in accounts – could be worth more.
Steve Windsor, of Atrato Partners, which advises investment trust Supermarket Income Reit, said they could be worth £9billion. It is understood that the portfolio has not been revalued since 2014.
Yesterday, former City minister Lord Myners claimed the board was not doing enough to protect shareholders.
He said: ‘The board has thrown in the towel. It is their duty to show how the supermarket can grow as a stand-alone company. I can’t see what these bidders bring. They are American and have little insight into the UK grocery market.’