Morrisons defends takeover in letter to Minister of Foreign Affairs


By James Davey

LONDON (Reuters) – Supermarket group Morrisons has written to Britain’s Secretary of State for Business and other politicians seeking to block opposition to its agreed-to £ 6.3bn ($ 8.7bn) buyout by the company private equity firm Fortress Investment Group.

Newspaper reports said Business Minister Kwasi Kwarteng wanted a meeting with Morrisons to get assurances on jobs, pensions and other matters, although a person familiar with the matter said he didn’t ‘there had been no requests so far.

Morrisons on Saturday backed the SoftBank-owned Fortress bid, which exceeded a £ 5.52 billion proposal from U.S. private equity firm Clayton, Dubilier & Rice (CD&R) that was rejected on June 17.

On Monday, Apollo Global Management, another private equity firm, said it was also considering an offer.

The letter to Kwarteng, seen by Reuters, explains why Morrisons regards Fortress as a “suitable and suitable owner” and a “good steward”.

The letter was copied to George Eustice, UK Minister for Environment, Food and Rural Affairs. Similar documents were also sent to lawmakers in constituencies where Morrisons is a major employer.

Opposition Labor and unions have said a buyout could affect jobs and investment, although a spokesman for Prime Minister Boris Johnson said the takeover proposals were up to the companies concerned.

Legal & General Investment Management, Morrisons ‘eighth-largest shareholder according to Refinitiv data, has expressed concern over a buyer who purchases Morrisons’ real estate portfolio at too low a price and burdens the company with debt.

Morrisons employs over 111,000 workers, works in nearly 500 stores and is unique among UK supermarket groups in making more than half of the fresh food it sells.

His letter lists the assurances he received from Fortress, including the retention of the current Morrisons management team and the execution of its existing strategy, maintaining its headquarters in Bradford, in the north of England. , and the non-sale of stores.

Other commitments focus on safeguarding current workers’ conditions and pension rights, maintaining good relationships with suppliers and farmers, and pursuing existing commitments on sustainability and food security.

“Given all of these assurances, the Morrisons board believes that Fortress would be a proper and responsible owner,” the letter said.

Morrisons shares are trading above Fortress’s bid of 254 pence a coin, suggesting investors are expecting a higher bid. The stock was last at 268 pence.

($ 1 = 0.7233 pounds)

(Reporting by James Davey; Editing by Mark Potter)

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