MPs to write to competition watchdog over potential takeover of Morrisons
The Business, Energy and Industrial Strategy Committee is reportedly preparing to write to the Competition and Markets Authority over the takeover of Morrisons.
The MPs’ decision to intervene followed concern from a group of Labour MPs that a private equity takeover of the UK’s fourth biggest supermarket would put thousands of jobs at risk, the Telegraph reported.
Yesterday Morrisons’ share price rocketed more than 30 per cent following news the supermarket had rejected a £5.5bn takeover bid from private equity firm Clayton, Dubiliter & Rice (CD&R).
Morrisons said it believed accepting such an offer would have “significantly undervalued” the company.
People close to the discussions told the Financial Times that CD&R would now wait to gauge investor reactions and if there is any political pushback before deciding what to do next.
CD&R has until July 17 to announce a firm intention to make an offer under UK takeover rules.
In a statement released over the weekend the private equity firm said there can be “no certainty an offer will be made”.
Sources close to CD&R have said the firm believes it “shares the values of Morrisons” and recognises the quality of the retailer.
Morrisons has significant ownership of parts of its supply chain and a large property portfolio which will appeal to possible buyers.
Neil Wilson, chief market analyst at Markets.com, said: “Owning the bulk of its store estate outright makes it an attractive asset for private equity intent on gearing it up.”