RUTH SUNDERLAND: Do they really want to sell Morrisons to a firm whose ex-boss paid paedophile Jeffrey Epstein £114m?
Bidding wars are usually greeted with great excitement in the City, but the battle that has broken out for control of supermarket group Morrisons should make our hearts sink.
No fewer than three rival US private-equity groups are vying for control of the grocery chain and still more contenders might well muscle in.
The Morrisons board gives every appearance of being giddy with the thrill of the auction room and the prospect of higher bids before the hammer falls.
In reality, all the offers lodged so far are low-ball attempts to grab one of our Big Four supermarkets on the cheap and ought to be rejected on that basis alone.
That, though, is not the real point. Morrisons should not be sold to any member of this circling private-equity wolf pack at any price.
Morrisons’ bidder Apollo’s co-founder Leon Black stepped down as chairman after revelations he paid the paedophile Jeffrey Epstein (both pictured) £114million for personal tax advice
The latest potential bidder, Apollo, looks particularly unsavoury.
Its co-founder, Leon Black, 69, stepped down as chairman and chief executive in March following revelations that he paid the paedophile Jeffrey Epstein £114million for personal tax advice.
Black, who received more than £134million in pay and dividends last year, was served with a lawsuit last month claiming he raped and sexually harassed a young Russian model.
He insists the accusations are lies and says the pair had a ‘wholly consensual relationship’ for six years.
Be that as it may, the late Sir Ken Morrison, who built the wholesome supermarket we know and love, would be choking on his cornflakes if he were still alive.
He would also be snorting in disbelief at the glib promises to preserve his legacy made by rival investment group Fortress, whose bid – shamefully – has already been accepted by the Morrisons board.
Black was served with a lawsuit last month claiming he raped and sexually harassed a young Russian model, but he insists the accusations are lies. Pictured: Apollo Global’s headquarters
The supermarket is unique in the way it stocks its shelves and fridges with produce from its own farms, manufacturing facilities and fishing fleets. Prudently, the firm owns many of its own stores, rather than renting them.
This, in the eyes of private equity, makes Morrisons ripe for plunder.
The notion that private equity would have the remotest interest in sustaining Sir Ken’s business model or his solid Yorkshire values is laughable.
If they take control, his legacy is likely to be dismantled wholesale in an orgy of asset-stripping and debt.
One wonders if we will ever learn, given there is a long list of such ‘promises’ made and then casually dishonoured by foreign buyers of UK firms.
Alarmingly, these include so-called commitments made by the owner of Fortress, a Japanese outfit called SoftBank.
It took over the Cambridge tech firm Arm Holdings five years ago and is now trying to flog it off to a US rival, despite painting itself as a long-term investor in the UK. ‘Promises’ such as these are no such thing – just so much cynical hot air.
Morrisons directors have a duty to follow the best course of action for shareholders, the business, the staff, the customers and the taxpayer.
Given these bosses are in line for multi-million-pound jackpots in a takeover, though, it must be hard to set aside self-interest.
Chief executive Dave Potts has put himself in line for a payout of £19million if the bid from Fortress succeeds, and possibly more if competitors up the ante.
Tempting as it must be to take the money and run, it is also short-sighted. With its huge growth potential, Morrisons has no need to put itself at the mercy of private equity. It could even be more rewarding for bosses to stick around and create long-term genuine growth.
Such a strategy certainly worked well for Frenchman Pascal Soriot, the chief executive of AstraZeneca.
The late Sir Ken Morrison, who built the supermarket (pictured), would be snorting in disbelief at the glib promises to preserve his legacy made by rival investment group Fortress
When US giant Pfizer came banging on his door with a £69billion bid in 2014 he mounted a robust defence, which has paid off brilliantly.
As an independent British firm, AstraZeneca has grown in value by tens of billions of pounds and has produced a life-saving Covid-19 vaccine.
It is barely conceivable that the company would have achieved any such thing if it had allowed itself to be swallowed up by an American aggressor, and was then starved of investment and shorn of its research facilities.
As for Soriot, he chose to forgo the quick bucks in 2014, but over his tenure he has earned a total of nearly £87million. Not bad.
The contrast with Morrisons is telling. Chairman Andrew Higginson and his spineless board, who have already rolled over like whimpering poodles, should be ashamed of themselves.
They need to show some backbone, mount a proper defence of Morrisons as an independent British company and show this disreputable bunch of bidders the door.
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