Morrison (wm) Supermarkets Share Discussion Threads

[chinese investor] 23/6/2021 08:33

An Amazon bid would be fun !

[liberace pickles] 23/6/2021 07:50

The share price of UK supermarket group Morrisons has jumped by over 30% after a US private equity firm made an offer to buy it for £5.5 billion.

The bid by Clayton, Dubilier and Rice, which is being advised by former Tesco chief executive Terry Leahy, was rejected as Morrisons believes the business is worth more.

But there is speculation that it may prompt others to bid – including Amazon.

Morrisons is the UK’s fourth largest food retailer after Tesco, Sainsbury and Asda, holding a 10.5% share of the market.

Founded by William Morrison in 1899, the Yorkshire-based company grew under the leadership of his son, Sir Ken Morrison, listing on the London Stock Exchange in 1967.

Morrisons further expanded in 2004 with the £3.3 billion acquisition of rival Safeway.

Now run by former Leahy lieutenants David Potts and Andy Higginson, it has around 500 stores nationwide.

Unlike many retailers, Morrisons did not have to close in 2020-21, but while its sales went up, annual profits have fallen because of costs associated with the pandemic.

Nonetheless, Morrisons is a perfect target for any overseas company looking to gain a share in the UK’s £230 billion grocery market.

The market has seen slow but consistent growth over the last few years and has had to respond to changing consumer demand for more online shopping and new technologies such as automated ordering using artificial intelligence.

Morrisons had previously been reluctant to be part of these changes, preferring to concentrate on traditional principles that always worked well for it.

The group did enter the online market in 2014 through a tie-up with Ocado, but would have been held back by the fact that orders relied on what was in warehouses and not on supermarket shelves.

Having started a deepening partnership with Amazon in 2016, it is gradually becoming a more serious online player.

More generally, the Amazon partnership has been a bright spot for Morrisons during the pandemic.

The US online retail giant has been selling groceries to its UK-based Prime subscribers through Morrisons’ online platform, for example, and providing lockers for Amazon deliveries in Morrisons stores.

Amazon has also grown its bricks and mortar retail business in recent years with its acquisition of Whole Foods in 2017 and its recent launch of three Amazon Fresh till-free stores in London.

Buying Morrisons would give it a much stronger foothold in the UK grocery market, and enable it to swiftly expand.

Morrisons is a trusted and stable contributor to the UK grocery sector, and has invested heavily over the last few years in both its retailing and wholesaling arms.

Stores have been refreshed with everything from the local-market-style Market Street counters through to new trollies in car parks.

On the wholesale side, Morrisons is the UK’s second largest fresh-food manufacturer after 2 Sisters.

By supplying not only its own stores but other retailers such as newsagent McColls in recent years, it has made the whole system more productive.

Amazon would therefore be buying into a supply chain that goes well beyond stores – much more so than Morrisons’ rivals – and an estate that covers the bulk of the UK even if it is predominantly in the north of England.

Amazon would add an abundance of cash to invest in the business, which would mean the potential for more stores in the south of England – particularly in the south-east, where Morrisons’ presence is scarce.

Amazon would also bring new technologies through its established online platform.

For example, Morrisons would potentially benefit from Amazon’s strengths in using algorithmic stock-ordering.

Amazon would also be very likely to further develop the online business and provide a faster and more efficient service across the country as a result.

At present, not all areas of the UK have access to Morrisons online, so this would be a big shift.

This all has the potential to shake up a sector where the top four have not been allowed to buy one another, and which has stayed fairly constant for several decades.

The main issue in recent years has been the rise of German budget operators Lidl and Aldi.

Any Amazon takeover will raise questions about workers, given the endless media questions about the conditions in its warehouses.

But in terms of shopping experience, consumers will clearly benefit from a takeover.

It would help Morrisons to attract a younger shopper base that fully understands the online space.

It would be another step towards an Amazon ecosystem in the home, where consumers get whatever they want when they need it from the online giant.

The likes of Tesco and Asda might finally have met their match.

[johnwise] 23/6/2021 07:43

If Amazon buys Morrisons, it should be a win for consumers and a major threat to other supermarkets

But there is speculation that it may prompt others to bid – including Amazon.

Morrisons is the UK’s fourth largest food retailer after Tesco, Sainsbury and Asda, holding a 10.5% share of the market.

[astute person] 23/6/2021 07:22

A takeover can take many twists and turns.

Worst scenario is there is no further bid, and CDR announce no further interest, share price reverts to pre-bid levels.

Mid scenario is CDR revert with a higher bid - perhaps around 250-260p?

Again, likely to be rejected but most likely share price would follow the bid.

Best scenario is bidding war - eg, Amazon decide to buy up Morrisons.

All of a sudden, we're in £4 territory.

I'd bet a fiver that the Amazon board is considering.

Logistics already half up.

It would be a revolution in shopping as Amazon bring their cashless/cardless model to the UK high street!

And bring in even more customers.

And can you imagine what they could do with the data they collect - and how they could tailor each supermarket to the individual needs of every single individual customer.

They'd essentially beat every other supermarket hands down and take over UK supermarket retailing.

[philanderer] 23/6/2021 00:24

Predators told to raise their bid for Morrisons as political backlash against the private equity takeover begins


City brokers yesterday said the private equity firm would have to dramatically raise the stakes if it is serious about buying Morrisons.

They said the supermarket’s board, led by chairman Andy Higginson, was unlikely to negotiate unless the bid was upped to at least 280p a share.

[chef2] 22/6/2021 20:41

Blackrock 😂😂😂
And re why were Silchester etc and me still buying, because it was cheap, and pays good dividends, under 2.50 it’s still cheap

[nerdlinger] 22/6/2021 16:52

I make it 44,339,579 shorts closed yesterday. Pelham is still an immovable object.

BlackRock Investment Management (UK) Limited WM MORRISON SUPERMARKETS GB0006043169 1.13 21/06/2021
BlackRock Investment Management (UK) Limited WM MORRISON SUPERMARKETS GB0006043169 2.29 23/04/2021

Pelham Long/Short Master Fund Limited WM MORRISON SUPERMARKETS GB0006043169 1.65 09/07/2020
Third Point LLC WM MORRISON SUPERMARKETS GB0006043169 0.50 29/07/2020

GLG Partners LP WM MORRISON SUPERMARKETS GB0006043169 0.53 25/05/2021
GLG Partners LP WM MORRISON SUPERMARKETS GB0006043169 0.38 21/06/2021
Citadel Europe LLP WM MORRISON SUPERMARKETS GB0006043169 0.80 18/06/2021
Citadel Europe LLP WM MORRISON SUPERMARKETS GB0006043169 0.27 21/06/2021

In accordance with Rule 2.9 of the City Code on Takeovers and Mergers (the "Code"), Morrisons confirms that, as at the close of business on 21 June 2021, it has in issue 2,409,759,748 ordinary shares

[russell crowe] 22/6/2021 14:56

Takeover target Morrisons has seen recent shopper spend fall from a year earlier when customers went on bumper buying sprees at the start of the pandemic, but the figure is still much higher than pre-Covid.

Data from market research firm Kantar shows some of the features that might make the grocery chain look attractive to private equity group Clayton, Dubilier & Rice.

The suitor recently proposed a 230p per share offer which has been rejected.

In the 12 weeks to June 13 £3.1 billion was spent at Morrisons.

That is down 1.5% year on year, but 8.9% higher than the same period in 2019.

The grocer’s market share was flat at 10.1%.

Rivals Tesco, Sainsbury’s and Asda all recorded improved market share versus the same time last year.

[philanderer] 22/6/2021 14:49

'Takeover target Morrisons saw recent sales lower than last year, but much higher than pre-Covid levels'

[edmondj] 22/6/2021 14:38

Book value is £4.2 billion, current market cap is £5.8 billion.

[nerdlinger] 22/6/2021 13:05

Nail on the head. I've held since 2014 paying average 206p/share so any trading profit looks lacklustre spread over seven years. Actually none of those numbers above would excite me, I'd prefer to still be a holder in 20 years from now.

[scotches] 22/6/2021 12:01

A quick look at the hi-lo yearly chart shows why 230p may not be particularly exciting to long term holders who might easily have secured their shares at such a level or higher. Top Shareholders:

That prices 170-180p were glaringly low was highlighted by the SBRY sprint away from mkt-cap similarity with MRW. There was no particular trading reason why SBRY should have opened up a 1 billion+ gap when MRW trading had been at least as good. Moreover why was value investor Silchester still adding to its already large position. There were months of opportunities to stock up at the lows while these possible bull points existed.


2020 203.70 157.55
2019 239.35 175.15
2018 270.50 203.30
2017 254.40 205.00
2016 230.82 144.40
2015 214.80 138.60
2014 262.50 150.60
2013 312.30 247.50
2012 339.70 255.20
2011 326.20 261.70
2010 307.10 255.00
2009 298.40 233.50
2008 324.25 210.75
2007 345.97 243.75
2006 275.00 183.25
2005 224.00 158.25
2004 259.81 169.88
2003 233.95 140.00

[chinese investor] 22/6/2021 11:44

The "£7.4b of property and assets" includes the £3.1b debt !

[ashleyjv] 22/6/2021 11:40

£7.4B - £4.3B = £3.1B debt?

[edmondj] 22/6/2021 11:22

Hindsight 'analysis'. Morrisons' property is not 'prime private equity' (to be flogged off), is integral to the business as part of its vertically integrated model.

He also ignores £3.2 billion net debt.

[lookagain] 22/6/2021 10:25

AJ Bell: Morrisons bidding war potential

Analyst Russ Mould said the balance sheet ‘has plenty of asset backing and the valuation was relatively depressed’ before the bid. As of close of trading on Friday, the business was worth £4.3bn but had £7.4bn of property and assets, which Mould said made it ‘prime private equity territory’.

[chinese investor] 22/6/2021 09:57

Look we could all see this coming.

It's been a sitting duck for the last 2 years.

OK no one wants to see this company bought out by an American company so why doesn't an English company buy it ?

The truth is that as usual NO other British / English company is willing to pay the money otherwise they would.

Most British companies just don't like to fund long term bets it's all about short term deals and then get out.

And it's about time that changed.

[cheshire man] 22/6/2021 09:30

Same here ashleyjv :-)

[kexicus] 22/6/2021 08:58

Disclosure of a holding over 1% that must be declared after offer RNS. I believe they have a maximum of 10 days to declare.

[ashleyjv] 22/6/2021 08:33

Our local Morrisons is fully stocked and competitively priced. Meat is definitely better and cheaper than Tesco

[chinese investor] 22/6/2021 08:16

Sad to see Morrison get taken out.

But years of mismanagement have finally caught up with it.

The shop is an overpriced, understocked, chaotic, offline fossil.

Feel sorry for frontline staff in the stores.

The best days are behind it.

The (most likely) American buyers will quickly asset-strip Morrison, quietly slash jobs, pressure remaining employees to work (much) more for less, load the firm up to the gills with debt, and run away with multimillion bonuses.

Also feel sorry for the London Stock Exchange.

MRW is yet another big delisting.

A flood of delistings, calamitous IPOs, and plunging liquidity... the London market is all but dead.

We're witnessing a collapse in the British retail industry, right before our very eyes.

Britain no longer has the wealth or management skills to compete with the best from America or Germany.

[trewsa] 22/6/2021 08:16

At the store 3 miles from me yesterday the checkout assistant said they had been encouraged to buy shares last week.Hmmmm......

[justiceforthemany] 22/6/2021 08:13

Unlimited losses for short sellers remember

[philanderer] 22/6/2021 00:44

Daily Mail market report:


....Legal & General, a top 10 shareholder, said it would not add 'genuine value'. But CDR is said to be preparing for another go, with other suitors waiting in the wings.

Internet shopping giant Amazon could gatecrash the process, while private equity firms Lone Star and Apollo previously bid for Asda.

Russ Mould, investment director at AJ Bell, said: 'The market value of Morrisons had weakened so much that it clearly triggered some alerts in the private equity space to say the value on offer was looking much more attractive.

The issue now is how the big shareholders respond and whether they – and the Morrisons board – feel they can squeeze out a higher bid or feel sufficiently confident in Morrisons' position to spurn the offer altogether.

'The market seems confident that the suitor will have to raise its offer or someone else might step into the game and we'll see a bidding war.' The groceries sector is highly competitive and is not seen as a typical hunting ground for private equity firms.

L&G senior fund manager Andrew Koch said he did not expect CDR to succeed unless it increased its bid.

full article: