Sir Terry Leahy set to return to supermarkets after spearheading £7bn takeover of Morrisons
Sir Terry Leahy is set to return to supermarkets after spearheading the £7billion takeover of Morrisons.
The former Tesco boss advised the successful bid by private equity giant Clayton, Dubilier & Rice (CD&R) – which triumphed against a rival offer from Fortress in a rare auction.
Leahy, 65, is widely expected to become Morrisons’ chairman once the deal completes, marking his first role at the helm of a top British supermarket in ten years.
At the helm: Sir Terry Leahy (pictured) advised the successful bid by private equity giant Clayton, Dubilier & Rice
New York-based CD&R put its first offer forward in June. The company went head-to-head with Fortress in a blind auction on Saturday, winning the showdown by just a single penny with a 287p-a-share bid, compared with 286p put forward by Fortress.
Morrisons’ board backed CD&R, with Leahy saying he was ‘gratified’ by the support.
Leahy added: ‘We continue to believe that Morrisons is an excellent business, with a strong management team, a clear strategy, and good prospects.’ CD&R’s takeover makes Morrisons the latest in a string of major British companies to fall to private equity since the Covid crisis began.
Many of the swoops have been on companies on the FTSE 250, where Morrisons is listed.
Others including Aggreko, Ultra Electronics and St Modwen Properties have also been targeted.
CD&R’s move on Morrisons was criticised by sceptics who argued it could be ruined by the typical private equity model, which sees vulture funds buy up companies, restructure them, break them apart and sell within a few years. But Leahy insisted CD&R was the right owner, citing his friendship with Sir Ken Morrison, the company’s longtime boss and son of its founder.
During his campaign, he said: ‘I knew Ken Morrison well and I understand the vision and values he built his business upon – values now championed by David Potts and the wider team.
‘And that’s why we’re so excited to work with that team, not only to preserve those traditional strengths of Morrisons but to build on them with innovation, capital and new technologies.’
The supermarket traces its origins back to 1899. It now has nearly 500 sites, around 118,000 staff and is the fourth largest in the UK.
Shareholders will vote on the deal later this month. If they wave it through, it still faces regulatory scrutiny and hurdles.
In his 14 years in charge at Tesco, Leahy transformed the company and became one of Britain’s most successful businessmen. From humble origins, he began working for Tesco as a marketing executive in 1979 after following his then-girlfriend to London.
Leahy was on the company’s board by 1992, becoming chief executive in 1997. He turned the company into Britain’s biggest grocer and was the architect of the Tesco Clubcard scheme – the first of its kind.
The lifelong Everton-fan and father-of-three stepped down in 2011 and later chaired budget retailer B&M – which was previously owned by CD&R.