American owners of Morrisons plan to sell property worth £500 million

AMERICAN owners of Morrisons plan to sell property worth £500 million just months after the takeover.

One of the undertakings that Clayton Dubilier and Rice (CD&R) gave in order to gain approval of its £7 billion takeover was that it wouldn’t sell off and then leaseback its valuable store portfolio at least in the early part of its ownership.

The bid document said: “Bidco [the company formed by the firm to implement the deal] recognises that the high proportion of freehold ownership of the Morrisons store estate is a particular strength of the business which has been carefully preserved over many years and will continue to be a cornerstone of Morrisons.

“Bidco does not intend to engage in any material store sale and leaseback transactions.”

According to Sky News, whilst earing this in mind, CD&R are looking to appoint advisers to arrange the sale of many of its manufacturing and distribution facilities across the UK in a bid to recover some of its investment.

In the meantime, a spokesperson for Morrisons indicated that it experienced a fall in earnings in the three-month period ending on 30 January, with underlying quarterly profits falling almost 10 per cent to £316 million due to inflationary pressures and this could be made worse by the Russian invasion of Ukraine.

As a final twist in the tale, Sky News also reported that CD&R is considering selling Motor Fuel Group (MFG), the largest independent operator of petrol stations in the UK due to pressure from the Competition and Markets Authority (CMA) after taking over the Morrisons petrol stations.

Looking to raise around £5 billion, one of the possible purchasers is another American investment company Fortress which also bid for Morrisons.

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