CD&R wins backing of Morrisons pension trustees

In a statement to the City, New York-based private equity firm CD&R said today it had reached an agreement with the trustees of the Morrisons Retirement Saver Plan and the Safeway Pension Scheme on a “comprehensive mitigation package” should they win the race for the grocery chain. 

CD&R said they “recognise the responsibility of the ownership of Morrisons” and added that the “constructive and efficient way” it had reached an agreement with the pension trustees “further reinforces that it will be a good partner” to the trustees and all of the grocer’s stakeholders more generally. 

As part of its agreement, CD&R said it had agreed to provide additional securities to the schemes, put in place “appropriate top-up and release” mechanisms for those additional securities and provide enhanced governance provisions and information-sharing agreements with trustees. 

CD&R said the final agreements reached with pension trustees would be published in its final bid document, the publication date for which has been pushed back until September 25. 

Chair of the trustees Steve Southern said: “We are pleased with the progress made and CD&R’s ability to provide the necessary support and reassurance to the schemes.

“CD&R has been proactive in its engagement with the trustees, with discussions progressing positively and decisively, delivering a positive outcome for all members of Morrisons’ pension schemes.”

CD&R’s senior adviser Sir Terry Leahy said: “We are delighted to have reached an agreement with the trustees, providing additional security and covenant support to the schemes. We thank the trustees for their constructive engagement, and the positive outcome underscores CD&R’s approach as a responsible investor and emphasises the respectful approach CD&R would take to its wider stakeholder responsibilities and commitments.”

The agreement sees CD&R push ahead of rival would-be owner Fortress, having become the preferred bidder for the business in August with its £7bn bid. 

Earlier this month, it was confirmed that the ongoing war between the two would go to an auction process.