Morrisons’ owners look to ease fears of a shift away from traditional business model
The private equity owner of Morrisons has looked to ease investor and supplier fears that they would renege on commitments to the firm’s traditional business model, as the chain faces down a mounting interest bill from lenders.
US-headquartered Clayton, Dubilier & Rice (CD&R), which won a £10bn bidding war for Morrisons in October, is facing rising interest payments on bridging loans as rising inflation and interest rates increasingly stretch the firm’s balance sheet, The Sunday Telegraph first reported.
Investors raised concerns during the bidding war that CD&R would shift away from Morrisons traditional savvy spending, dislike of debt and commitments to British farming.
But CD&R assured investors that it will not move away from the model to foot the bill.
A spokesperson said this weekend: “CD&R values Morrisons’ distinctive business model and is committed to supporting it.”
The commitment follows assurances during the bidding war last year that CD&R recognised the importance of Morrisons business model, committing to invest in its supply chain and “nurture the relationships with its supplier network.”
Morrisons is the largest customer of British farming and works directly with 3,000 livestock farmers and 200 growers.
The assurance will soothe fears from the chain’s farming suppliers after Asda abandoned a commitment to sell 100 per cent British beef due to high prices.