Morrison (wm) Supermarkets Investors - MRW

Morrison (wm) Supermarkets Investors - MRW

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Stock Name Stock Symbol Market Stock Type
Morrison (wm) Supermarkets Plc MRW London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
1.10 0.38% 292.20 16:35:24
Open Price Low Price High Price Close Price Previous Close
291.40 291.40 292.80 292.20 291.10
more quote information »
Industry Sector
FOOD & DRUG RETAILERS

Top Investor Posts

DateSubject
25/9/2021
23:51
maxk: Morrisons bidder plans to control supermarket from Cayman Islands Private equity firm lines up entity in Caribbean tax haven to exercise control over Britain’s fourth-largest grocer By Simon Foy and Laura Onita 25 September 2021 • 8:00pm The US buyout firm leading the £10bn race for Morrisons plans to control the supermarket via a company registered in the Cayman Islands, threatening to stoke a row about tax avoidance as big listed companies are snapped up by private investors. A trail of ownership ending in Grand Cayman was revealed after Clayton, Dubilier & Rice (CD&R) unveiled full details of its recommended bid before a vote by Morrisons shareholders. An entity called Market21 GP Holdings has been lined up in the Caribbean tax haven to exercise control over Britain’s fourth-largest grocer. The documents also reveal that bankers, lawyers and public relations advisers are due to receive fees of more than £400m if the bid succeeds. Although CD&R’s offer has been recommended by the Morrisons board it is still at risk of challenge by rival buyout firm Fortress. Neither firm has declared their current bid final and preparations are being made for a dramatic head to head auction that could end in blind bids next month. CD&R’s bid values Morrisons at £9.7bn including debt. The decision to run the supermarket via an offshore entity comes as Rishi Sunak, the chancellor, is set to hike Britain’s corporate tax rate to 25pc from April 2023. Morrisons paid £47m in UK corporation tax in its latest financial year, down from £60m in 2020. Kevin Hollinrake, a Conservative MP, said he will be writing to Sir Terry Leahy, the former Tesco boss who is spearheading CD&R’s bid, seeking assurances that the firm will pay UK corporate tax rates on Morrisons’ turnover. He said: “We should expect CD&R to set out very clearly that they’re going to pay UK rates of corporation tax.” CD&R defended its planned corporate structure, with a spokesman saying that should the private equity firm assume ownership of Morrisons, it will “remain registered in the UK, headquartered in the UK and continue to pay taxes in the UK”. More lies here: https://www.telegraph.co.uk/business/2021/09/25/morrisons-bidder-plans-control-supermarket-cayman-islands/
09/9/2021
16:15
jlondon: "Morrisons bidding war overshadows disappointing interims."-Proactive Investors, Thur, 9 Sep 2021, 7 hrs ago. "...unlikely to dampen the buying interest from private equity rivals, CD&R and Fortress and the formal auction later this month is likely to see the BIDDING TOP 300p level, said independent retail analyst Nick Bubb." To read, call up the title for all the details.
09/8/2021
10:01
jlondon: "Morrison^s suitor given more time to "put up" or "shut up" as bidding war looms."-Sky News, 8:14am, Mon 9 Aug 2021. "Shares in Morrisons -up almost 60% in the yr to date as a result of the bid interest closed at 278.8p on Fri, indicating investors are hoping for a higher offer. The stock was trading at 280p in early deals on Mon."
08/8/2021
16:38
chinese investor: One of Britain's biggest convenience store groups is plotting a £30m cash call to accelerate the expansion of its partnership with Morrisons, the supermarket giant. Sky News has learnt that McColl's Retail Group has approached institutional investors about a placing to raise almost as much as its existing £40m market capitalisation. McColl's could be forced to confirm the talks in a statement to the London Stock Exchange as early as Monday morning.
06/8/2021
13:11
loganair: BBC - Supermarket chain Morrisons says it has agreed to a revised takeover offer worth £6.7bn, up from £6.3bn, from a private equity consortium led by Fortress Investment Group. The increased offer, worth 272p a share, comes after some key investors rejected a previous 254p a share offer.
04/8/2021
19:27
loganair: Why private equity wants to take UK assets off the shelf - By Alec Mattinson: The bidding war for Morrisons is expected to ratchet up with week with expectations of an imminent higher offer from CD&R putting pressure on the Fortress-led consortium and the Morrisons board. The Morrisons board has accepted a 252p per share offer from Fortress and its backers, but a Sunday Times report suggested bids and counterbids could raise the level to 290p per share by the end of the bidding. Even that – which would value the supermarket at just over £7bn – is short of fair value for the supermarket, according to cashflow analytics specialist Quest. The division of Canaccord Genuity distinguishes itself from more conventional equity analysts by undertaking cashflow valuation analysis of companies for institutional investors – in effect, advising big investors on whether to accept bids for stocks they hold in their funds. For Morrisons, it argued in a recent note the current bid levels remain materially lower than its own current adjusted value per share of 314p based on assumed cashflow returns. Morrisons, it argues, is just one of a plethora of stocks being fundamentally undervalued by the market, which uses different valuation metrics to those private equity investors are employing. “Private equity investors want to know what their return is,” says Quest director Graham Simpson. “They don’t care about PE ratios, DCFs and all of the other classical conventional valuation metrics.” Ultimately, he says, PE investors want to know: “What is my annual return over the next three years and how does that compare to the cost of debt?” Looking at UK-listed stocks through this lens, Quest identified particular opportunities for private equity to take undervalued assets at the small end of UK plcs. Some 177 stocks with a market capitalisation below £1.5bn have an leveraged buyout free cash yield above 10% – a key metric making them very attractive to a PE acquirer. Under-pressure retailers are among those currently most undervalued – according to Quest’s research – with names such as Topps Tiles, Smiths News, Dixons Carphone and Halfords all having an LBO free cashflow yield of between 15% and 30%. Perhaps most notably for the grocery sector, Sainsbury’s is the most attractive food retail name, with a LBO FCF of 15.3%. Quest’s Simpson cautions that this current Sainsbury’s level is before a bid premium that would see it fall. For example, assuming a bid came in 30% higher this would see the Sainsbury LBO FCF yield fall to 12%. However, this level remains “incredibly attractive”, he says. “PE typically take a three to five-year outlook in their LBO models,” he explains. “Therefore, the return would be 12% per annum and you still own Sainsbury’s to which you can also apply typical PE levers such as improving working capital delaying paying creditors, reduce stock, strip capex down, run it lean, close stores, to extract further value.” The big payday at the of this process, he says, is an ultimate exit and possible IPO having recouped plenty of the PE investment already during the ownership period. McColl’s, currently at a LBO FCF level of 12.8%, is also picked out as representing value. Meanwhile, among food suppliers Finsbury Food Group (14.4%), Wynnstay (14.1%), Carr’s Group (10.7%) and Stock Spirits (10.6%) are above the key 10% level, while in householder and personal goods Accrol (18%) also makes the cut. “Finsbury Food is incredibly cheap on our 40-year DCF [discounted cash flow] model, which is more robust than outdated conventional valuation metrics that are point in time and look no further than the current or following year,” he explains. He describes the current post-Covid differential between market and PE valuations as “unprecedented” and “shows the true extent of the UK plc undervaluation relative to global peers”. “We do not see the current enhanced M&A interest in the UK plc slowing and we expect H2 2021 to be just as frenzied.” The Morrisons bidding war may be just heating up, but it’s unlikely to be the last this year.
03/7/2021
18:12
loganair: Protection vs plundering - why Morrisons is backing the Fortress bid: It’s not about the price. The 254p Fortress cash offer for Morrisons, announced today and recommended by the Morrisons board, is only 8% more than the 235p bid tabled by US private equity giants Clayton Dubillier & Rice last month. And of course, CD&R may yet up its offer, as indeed may others, to take the hostilities further. But the significance of the Morrisons board’s acceptance of a takeover by Fortress is in “the fulsome set of commitments in its intention statement”, as chief commercial officer Trevor Strain put it in a call to me this morning, “not just to investors but to all its stakeholders including colleagues, suppliers, farmers and pension holders”. So who are Fortress? What does their offer entail? What commitments has Fortress made to its stewardship of Morrisons? And how can we be sure they won’t renege on them? Serious owners In contrast with CD&R, Fortress is a global asset management fund, with over £53bn in global assets managed on behalf of 1,800 institutional clients and private investors. And the investment of “in excess of £3bn” in equity capital in the all-cash offer “underpins them as serious owners”, says Potts. The implicit contrast Potts draws with CD&R’s bid is stark. With lower debt levels to service, Fortress “does not anticipate engaging in any sale and leaseback”, it promises. It’s also “fully supportive” of the recent increase in the hourly rate of pay to £10 an hour for store colleagues – “the highest in the market,” adds Potts, proudly, in recognition of their valiant contribution in the pandemic, while there’s also no plans to change the pension rights and benefits. In other words Fortress, rather than saddling Morrisons with debt, and engaging in the speedy financial flips that private equity is famed for, is positioning itself as a ’patient capital’ player, focused on protecting and nurturing rather than plundering and asset stripping. As Fortress managing partner Joshua A Pack said: “We believe in making long-term investments focused on providing strong management teams with the necessary flexibility and support to execute their strategy in a sustainable and value enhancing manner.” As evidence Fortress can point to its 19-year track record in supporting grocery retail businesses including the likes of Albertsons, Fresh & Easy and A&P in the US, as well as US-based petrol forecourt and convenience operator United Pacific in 2013, which has since increased from 129 stores to 650. Its approach to UK-based Majestic Wine, acquired in late 2019, is also instructive, it argues: it’s not sold any of its freehold and long leasehold properties, and it reversed planned job cuts and store closures in the UK (albeit conditions are more favourable since the pandemic due to Majestic’s status as an ‘essentialR17; retailer). In contrast with private equity players, there’s also no intention to bring in a separate operating team. “They aren’t there to operate the business,” says Potts. “They are backing the existing management, the strategy, the people”. Indeed Fortress was glowing in its praise for Potts & co: “Whether it is grocery delivery, hiring new staff to help pick and pack customer orders or integrated vertical sourcing of products, Morrisons management has taken steps to be at the forefront of these trends rather than trailing them.” True, there are questions over the long-term commitment of Potts, 64 and chairman Andy Higginson, 63. But the offer provides explicit support for the management team’s strategy in every way: in terms of its customers (“a central part in the fundamental character of the Morrisons business”); its suppliers (anticipating “no material changes to existing payment practices”); its vertically integrated supply chain; its programme of targeted new store openings (combined with online sales growth); its focus on wholesale channel development; its support for carbon reduction plans and other sustainability measures. There’s also no plans to move the Bradford HQ. Good stewards Nor is this a case of Morrisons desperately seeking out a more friendly backer following the CD&R approach in mid June. On the contrary, talks with Fortress have been ongoing since 4 May, when an initial 220p per share bid was made. And Fortress has dedicated “significant resources to developing a through understanding of Morrisons’s positioning and long-term potential”. That was backed up by Pack’s promise of playing a benevolent role, to be “good stewards of Morrisons, to best serve its stakeholder groups, and the wider British public, for the long term.” As to the possibility of Fortress backtracking on its commitments, says Potts, “we’ve been talking to them for several weeks and have no reasons not to trust them”. Indeed changes to the UK Takeover Code that were made in the wake of Kraft’s acquisition of Cadbury in 2011, adds Strain, mean that “the intentions document of an acquirer has a legally binding effect. If you look at those intentions there’s a very specific commitment to colleagues, pension holders, it’s a fulsome set of intentions that are binding. That regulatory framework is clear and understood.” So what happens next? In the next 28 days a scheme document will outline further details of the offer, which would then need to be approved by shareholders “over the summer”, Potts advises. Meanwhile, it’s not inconceivable that both CD&R and other private equity players may up the stakes and table higher bids. But Potts stresses that it’s not just a case of the highest price taking the spoils. “The underpin on the pension, anticipating no material change in leaseback obligations, the fact our terms and conditions aren’t changing, bearing in mind the £10/hour commitment, these are all important considerations. Boards have a responsibility to both the price achieved in any acquisition and the implications for a wider set of stakeholders than just investors. We have given extensive consideration to this bid prior to recommending it. “Any rival bid would have to address those competitive positions. All of us in the board have a very important responsibility to assess future owners of Morrisons. That combination of the premium and the intention and scale of the equity versus debt will have to be compared with other investment alternatives by us and by the companies themselves as they go through their own process.” That backing puts Fortress firmly in the driving seat. And means that any rival bid from CD&R or other private equity rivals will need to up the stakes on every level. Over to you Sir Terry.
30/6/2021
08:07
chinese investor: The private equity suitor seeking to buy Morrisons should increase its offer to £6.5bn if it wants the takeover to succeed, a top shareholder in the supermarket has said. Clayton, Dubilier & Rice (CD&R) must hike its bid from 230p per share to 270p if it wants to seal the deal according to J O Hambro, one of the chain's 10 biggest investors. J O Hambro said that Morrisons' board was correct to reject the initial offer, which valued the grocer at £5.5bn, but indicated it could back a deal at a higher price. The investor said: "We believe any offer for the group approaching 270p per share merits engagement and consideration." Its intervention comes amid speculation that CD&R - which is advised by Sir Terry Leahy, the former Tesco boss - will have to clarify its intentions for the supermarket as soon as in the week. It has until July 17 to make a firm offer for Morrisons. Other major shareholders, including Morrisons largest investors Slichester, have so far declined to comment. J O Hambro, which owns 3pc of Morrisons, said the supermarket has "a growing reputation in convenience, wholesale and non-food retailing and a strong presence in forecourt retailing". It pointed out that CD&R already owns Motor Fuels Group, a major UK petrol station chain. The combined company would have around 1,200 forecourt sites across the UK. The shareholder added: "The fuel purchasing and food retailing synergies here are clear to see. But CD&R should pay a fair price in order to access those synergies." A successful tie-up would closely mirror the recent £6.8bn acquisition of Asda by the Issa brothers, owners of petrol station giant EG Group, with co-investor TDR. Private equity firms Lone Star, Apollo and KKR as well as Amazon have all been listed as a possible interested parties. A City source close to one of the firms said that it ids conducting basic due diligence, but is unlikely to intervene until CD&R's intentions become clear.
29/6/2021
20:58
hades1: Morrisons bidder CD&R should raise offer to £6.5bn, investor saysShareholder JO Hambro said New York-based bidder Clayton, Dubilier & Rice must pay "a fair price" for MorrisonsByLaura Onita, RETAIL EDITOR 29 June 2021 • 6:09pm Daily Telegraph The private equity suitor seeking to buy Morrisons should increase its offer to £6.5bn if it wants the takeover to succeed, a top shareholder in the supermarket has said.Clayton, Dubilier & Rice (CD&R) must hike its bid from 230p per share to 270p if it wants to seal the deal according to J O Hambro, one of the chain's 10 biggest investors.J O Hambro said that Morrisons' board was correct to reject the initial offer, which valued the grocer at £5.5bn, but indicated it could back a deal at a higher price.The investor said: "We believe any offer for the group approaching 270p per share merits engagement and consideration." Its intervention comes amid speculation that CD&R - which is advised by Sir Terry Leahy, the former Tesco boss - will have to clarify its intentions for the supermarket as soon as in the week. It has until July 17 to make a firm offer for Morrisons. Other major shareholders, including Morrisons largest investors Slichester, have so far declined to comment. J O Hambro, which owns 3pc of Morrisons, said the supermarket has "a growing reputation in convenience, wholesale and non-food retailing and a strong presence in forecourt retailing". It pointed out that CD&R already owns Motor Fuels Group, a major UK petrol station chain. The combined company would have around 1,200 forecourt sites across the UK. The shareholder added: "The fuel purchasing and food retailing synergies here are clear to see. But CD&R should pay a fair price in order to access those synergies."A successful tie-up would closely mirror the recent £6.8bn acquisition of Asda by the Issa brothers, owners of petrol station giant EG Group, with co-investor TDR. Private equity firms Lone Star, Apollo and KKR as well as Amazon have all been listed as a possible interested parties.A City source close to one of the firms said that it ids conducting basic due diligence, but is unlikely to intervene until CD&R's intentions become clear.
26/3/2021
10:33
loganair: A group of UK fund giants have indicated they will not be taking a bite of Deliveroo’s £8.8bn IPO as concerns mount over the firm’s working practices. A combination of lack of investor power and poor working conditions for its delivery riders has turned BMO Global, Aberdeen Standard, Aviva Investors, L&G, CCLA and M&G off the fast food delivery company. The concerns came as a study from the Bureau of Investigative Journalism found Deliveroo’s delivery riders were receiving less than the minimum wage after analysing 3,000 invoices from more than 300 riders over the past year. Shareholder lobby group Pirc described the findings as concerning. ‘Investors considering taking a position in Deliveroo should familiarise themselves with these matters and the risks and responsibilities involved along with all other relevant factors,’ head of stewardship Tom Powdrill said. Ticking time bomb: BMO director of global equities Phil Webster said that Deliveroo faces significant competitive pressures, drawing attention to potential regulatory changes which could impact the firm’s profitability path, making it a ‘ticking time bomb’ and ‘uninvestable’. ‘Deliveroo faces significant pressure from the market leader, Just Eat Takeaway, which is investing heavily to improve its restaurant coverage and delivery proposition, through an “employed rider” model.’ ‘We also see headwinds to Deliveroo’s revenue growth as we exit lockdown and customers return to dining out in restaurants. These revenue risks are further compounded by the issues around workers’ rights and a potential regulatory change, which would hamper its path to profitability. Sustainability: Aberdeen Standard Investments UK equity head Andrew Millington also categorically said his firm would not be taking part in the IPO. Governance concerns also leave him questioning the sustainability of Deliveroo’s business model. ‘We will not be taking part in the Deliveroo IPO as we are concerned about the sustainability of the business model.' While M&G recognises the disruptive impact Deliveroo has had on the food services market, it also intends to give the IPO a wide berth. The fund firm’s head of corporate finance and stewardship, Rupert Krefting, told reporters. ‘Whilst we acknowledge the disruptive impact that Deliveroo has had on the food services market, we still see risks to the sustainability of its business model for long term investors,’ he said. ‘This is largely driven by the company’s reliance on gig-economy workers in the UK as informal employment contracts potentially fall short in offering the value, job security and benefits of full employment.’ The concerns of these influential investors casts a shadow over one of the biggest London floats for a home-grown tech company.
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