Morrison (wm) Supermarkets Share Discussion Threads

[philanderer] 07/7/2021 23:53

Morrisons defends its private equity takeover amid calls for Parliament to scrutinise the £6.3bn deal


Morrisons last night sought to head off political opposition to a private equity takeover of the supermarket amid calls for Parliament to scrutinise the £6.3billion deal.

In a letter to government ministers and MPs in constituencies where it is a top employer, the grocer claimed that buyout firm Fortress and its backers would be ‘good stewards’ of the business.

It listed undertakings the consortium has given on pay, suppliers and properties, despite questions about how binding these will actually be and for how long.

[tygwyg] 07/7/2021 16:06

Brandes once again sell a chunk for a price beginning with a 3..... interesting

[pjleeds] 07/7/2021 15:04

100% with you on AMAZON idea, that is if they decide to get involved. I can't see Amazon changing much how the business operates. Having said that if it gets sold we the shareholders and therefore the owners will get our noses pushed out (of the trough).

[kingalf] 07/7/2021 13:16

The way I see it, if you are looking to preserve the business as is, you can get away with a lower offer and will have the boards blessing as demonstrated by the accepted offer from Apollo.
If you are perceived to want to load the business with debt, cut costs and asset strip you will have to pay up.
Therefore, Amazon will not have to bid very much higher than the existing accepted offer to secure the business, who would staff rather sell to, a consortium saying the right things or a company like Amazon who are existing partners.
If Amazon does decided to buy I expect an offer close to the accepted offer, they really don't need to pay up

[johnwise] 07/7/2021 07:36

Asset strippers took out Debenhams, Sold their properties, then rented them back to Debenhams.. Is Morrisons next on the hit list ? .. Morrisons own 80 percent of its properties

Morrisons: Government seeks assurances over Fortress takeover bid

[leadersoffice] 07/7/2021 07:07

Makes sense…. Amazon has a new CEO on the scene. Plus Morrison’s have been selling Amazon products for a few years now. It would be a good entry into the UK market.
Tech leading the way. We need to see some more bids coming in this week. Let’s juice it up a bit.

[chinese investor] 07/7/2021 02:56

Amazon could yet make a takeover bid for Morrisons according to analysts as a potential bidding war for the grocer heats up.

Despite accepting a takeover offer, the deal still needs to be approved by shareholders who may well shun the firm if a better offer is made.

Many have pointed to Amazon, which significantly expanded its partnership with Morrisons last August and now sells its entire range on its platform.

“Amazon’s UK supply chain has become inexorably linked to Morrisons during the pandemic,” ParcelHero’s head of consumer research David Jinks said.

“Not only does it source Amazon Fresh online orders, Morrisons also stocks Amazon’s three, pioneering, till-free Amazon Fresh stores in London.
Morrisons’ Amazon deliveries are now available in around 50 towns and cities across the UK.
The tie-up has become so successful that it now accounts for over 10 per cent of all sales at participating stores.”

Jinks believes a third-party takeover could be bad news for Amazon, which is perfectly positions to utilise Morrisons store estate and established supply chain to help it break into the UK grocery market, an ambition it has been investing in significantly this year.

“Fortress̵7; offer of 254p per share now looks a little low, with the stock price reaching a high of 268p recently,” he added.

“Who has the money to top this offer?
Amazon is known to have a bulging war chest.
Incomer Andy Jassy has worked hand-in-glove with his former boss, Jeff Bezos, and is known to fully support Amazon’s philosophy that you must speculate to accumulate.
Some analysts are saying bidding could go as high as 280p per share, a price well within Amazon’s reach.”

Interactive investor Richard Hunter believes it is “perfectly feasible” that other bids could still be made and that Amazon could yet “emerge from left field as a surprise last minute entrant”.

“UK supermarkets in general are cash generating engines, whose share price gains have been capped by the costs of the pandemic, despite increased sales, making them more attractive on valuation metrics,” he added.

“In addition, Morrisons largely owns its freehold estate, adding another sweetener to any potential purchase.”

Edge by Ascential’s retail analyst Chris Elliott meanwhile believes Morrisons could be too small for Amazon to consider taking over, suggesting it could instead favour Sainbsury’s.

“Amazon and Morrisons have had a partnership since 2016 and there has always been speculation that Amazon would bid for the supermarket to significantly expand its grocery offering.

“However, more than five years later its has yet to submit an offer and with a bidding war on the horizon, it seems unlikely it will choose this moment to strike.

“However, if Amazon is looking to enter the market its option are running short, with Asda sold last year and Tesco’s huge valuation.
It may then feel the pressure to bid but given its acquisition of Whole Foods in the US, it may be looking for a more premium retailer and while it could be tricky, Sainsbury’s is arguably now its best option if it wants to enter the market via a takeover.”

[philanderer] 07/7/2021 00:22

Mark Kelly, managing director at investment bank Cowen, said in a note on Monday that the “only risk worthy of any level of discussion would be the scope for the UK secretary of state for Business, Energy & Industrial Strategy to intervene”.

But he added that Fortress had gone to great lengths to address this. “There is indeed a very low risk of the UK government intervening.”

[philanderer] 07/7/2021 00:12

'Morrisons chief to be quizzed over £6.3bn takeover: Business secretary Kwasi Kwarteng seeks meeting with chairman'

[rolo7] 06/7/2021 23:00

sbry profit upgrade today surley same for mrw also to come at half year results, wonder is q2 trading statement would be put out?

[philanderer] 06/7/2021 13:57

Politics ;-)

[spob] 06/7/2021 13:38

Could be a good time to short this. Limited upside - Huge downside possible

Remember what happened to the Sainsbury share price when bidders realised what they were getting into back in 08/09

[leadersoffice] 06/7/2021 11:03

There irrelevant..., shady lot who recorded almost 600 m loss on Archegos collapse.

[philanderer] 06/7/2021 09:26

CREDIT SUISSE CUTS MORRISON SUPERMARKETS TO 'NEUTRAL' ('OUTPERFORM') - TARGET 254 (216) PENCE

[philanderer] 05/7/2021 23:28

Analysts said other potential bidders could be waiting in the wings as well, from rival private equity firm Lone Star to tech giant Amazon, which has an online delivery partnership with Morrisons.

Sainsbury's is another potential bidder being touted by analysts as the grocer looks to grow its market share.

[philanderer] 05/7/2021 23:22

bountyhunter, no problem.

Guardian:

Britain’s largest asset manager has warned that Morrisons could be taken over by a private equity outfit for the “wrong reasons”.

Legal & General Investment Management (LGIM) warned on Monday that potential buyers should not buy Morrisons to take advantage of a possibly undervalued property portfolio, to load it up with debt, or to cut its tax bill, in comments that appeared to criticise practices commonly associated with the private equity industry.

[bountyhunter] 05/7/2021 19:36

I hope you don't mind if I post that on the Tesco thread Philanderer.

[bountyhunter] 05/7/2021 19:35

In which case I presume he would say the same if Amazon were to bid for Tesco!

[bountyhunter] 05/7/2021 17:22

speculation? lol!

[johnwise] 05/7/2021 15:53

Battle for Morrisons boosts supermarket shares: News that third private group is circling the Bradford-based retailer sends stock soaring 11%


Apollo said that it was in the 'preliminary stages of evaluating a possible offer'

There is speculation that a full-scale bidding war could break out for Morrisons