Morrisons founding family mulls £7bn deal to take it private

Sir Ken Morrison and family have a 9% stake in the retailer and have approached private equity firms CVC Capital Partners, Carlyle Group and Apax, Bloomberg reported.

CVC and Carlyle have reportedly discussed working on a joint bid while Apax has decided not to pursue a bid.

Sir Ken Morrison, the 82-year-old son of the founder who ran the business for 40 years, has previously expressed concern over chief executive Dalton Philips’ strategy to launch food online, build a convenience arm and take its offer upmarket via its Fresh Format stores.

Philips is battling to turn around the grocer’s performance after like-for-like sales slid 5.6% over Christmas.

Shares in Morrisons surged this morning on news of the potential £7bn buyout.

However, the City was skeptical over whether a deal would happen.

Barclays analyst James Anstead said: “The size of a deal means that it would likely involve more than one firm, requiring a degree of co-operation that would complicate a potential deal. Typically buyout firms approach shareholders rather than the other way around, so this aspect of the news reduces the likelihood of a deal in our eyes.

“Bear in mind that the family have less than 10% of the shares, so they are far from controlling shareholders. The family’s apparent willingness to sell certainly removes a potential obstacle to a deal since a 10% stake is certainly not immaterial and if they had been implacably opposed that might have convinced others to reject any buyout proposal.”

Shore Capital analyst Clive Black added: “This is because we do not believe, as maybe the case for any new owners too, that this is a feasible plan and dealing with it sooner rather than later may be the best course of action to a recovery story.”

Morrisons declined to comment.