UK: Sir Ken "surprised" at Morrisons takeover report
Morrisons' performance has been under scrutiny in recent months
The founder of Morrisons has reportedly expressed surprise at a report that claimed the UK grocer's founding family had approached private-equity firms to see if they wanted to jointly bid for the business.
Sir Ken Morrison this afternoon told The Independent he was "quite surprised" to see a Bloomberg report that said members of the Morrison family had held talks with buy-out houses Apax Partners, Carlyle and CVC Capital Partners.
"They [the family] will all have considered views on the performance of the business. I am honorary president, which means I don't have a vote, I am not consulted and I don't have views. It's not a job that I relish, you know."
Bloomberg had reported the Morrison family, which holds around 9% of the retailer's shares, had contacted the private-equity firms to gauge interest in a bid. Apax had decided not to press ahead with a move for Morrisons, the newswire said.
Morrisons has seen sales come under pressure in recent quarters. Its sales fell in its last financial year, which ran until 3 February. Sales have also declined year-on-year in each of the first three quarters of Morrisons' current fiscal year.
Last month, Morrisons reported a near-6% drop in like-for-like sales over Christmas. The UK's fourth-largest grocer said its like-for-like sales fell 5.6% excluding fuel in the six weeks to 5 January. Total sales excluding fuel decreased 1.9%. The retailer also warned it expected its annual underlying profits to be "towards the bottom end" of current market expectations.
Sir Ken has been a critic of Morrisons in recent years. In the summer of 2012, he warned Morrisons was losing relevance with core customers, a view echoed by some industry watchers.
Data issued by Kantar Worldpanel yesterday showed Morrisons had seen its share of the UK grocery market erode year-on-year, prompting criticism from the City over its performance and trading strategy.
Reflecting on today's Bloomberg report, one critic, Shore Capital analyst Clive Black, said: "Given Morrisons' trading weakness and relatively low valuation, such headlines and potential initiatives are to be expected to some degree at this time, in our view. Indeed, we would expect a number of serious private-equity investors to be running the rule over Morrisons."
Morrisons declined to comment. CVC said it had "no comment on this speculation". Carlyle had not returned a request for comment at the time of writing.
Having shed significant share over the last two years of the review period, Wm Morrison Supermarkets Plc is looking to become more competitive once again. It is facing stiff competition from discounte...
Innovation and evolving consumer palates are driving what little growth there is. More unusual packaged bread types are preventing the category from becoming stale. More sophisticated bread types are ...
Health and convenience continue to provide the biscuit category with vitality. These two features have combined to play a large role in the success of products such as plain breakfast biscuits. This p...
Once a static market, breakfast cereal innovation continues apace. The core focus continues to be on developing portable products, perceived to be healthy, which can be consumed on the go. These produ...
- Why Mars rice plan not just crop-ticking exercise
- ConAgra Foods: what could happen next? - analysis
- Greencore's food-to-go focus paying dividends
- Interview: Ritter sees growth potential in US, EU
- How Danone aims to meet its 2020 objectives
- Pinnacle to buy Boulder Brands in $975m deal
- Aryzta regional CEO steps down
- Maple Leaf Foods to cut over 400 jobs
- Hovis plans cuts amid anxiety over UK bread demand
- "Serious" suitors lined up for Chicken of The Sea