News Column

Buyout talk sweeps over Morrisons

February 13, 2014

Scott Reid

The founding family of supermarket chain Morrisons has sounded out private-equity funds to weigh their interest in taking the group private.Shares jumped by more than 5 per cent before closing just 0.6p higher at 237.8p after it was reported that the family, which still holds about 9.5 per cent of the company, had contacted firms such as Apax Partners, Carlyle Group and CVC Capital Partners.However, analysts cast doubt on any imminent agreement amid concerns about Morrisons' rate of growth and the scale of the deal. Britain's fourth-biggest grocery business has a market value of almost GBP6 billion.Analysts at Shore Capital, who have a "hold" note on the stock, said: "We now watch matters with interest albeit our central expectation is that the status quo will persist for now. If recent trading momentum is sustained for any reasonable period of time, then... material downgrades can be expected."In a note, Barclays' analysts said: "We are sceptical that a deal is likely given its size and the fundamental trading weakness of Morrisons."Bloomberg, which reported the initial contact between the family and private equity firms, said a buyout of Morrisons would exceed GBP7bn and require a group of funds to work together.

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Source: Scotsman, The (Scotland)

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