When the Daily Mail started its campaign to curb predatory private equity, the audacious bidding for Morrisons had not been made public.
But it was only a matter of time, I felt, before the buyout sharks fixed their cold, hungry eyes on a household name company.
It gives me not an ounce of pleasure to have been proved right.
After months of circling by two rival bidders, the supermarket chain will fall into the jaws of US private equity barons Clayton, Dubilier & Rice, barring any last minute sand in the wheels from shareholders or the Government.
Executives at the grocery chain did not put up much of a struggle. Some may think this is because they are in line to share a £39million jackpot. I couldn’t possibly comment.
Sir Terry Leahy, the former Tesco boss turned private equity kingpin who is leading the bid, also stands to make millions.
So too do the bankers, the lawyers and public relations advisers who are in line to divvy up £400million in fees.
When the Daily Mail started its campaign to curb predatory private equity, the audacious bidding for Morrisons had not been made public, writes RUTH SUNDERLAND
Outside of the small, already wealthy circle who will cash in on this feeding frenzy, it is hard to see any winners. Customers, staff, taxpayers and the nation as a whole are all likely to be left worse off.
Private equity is not all bad. Indeed, a previous deal involving Sir Terry for discount chain B&M is one of the success stories.
Yet its debt-heavy, short-termist business model is inherently risky and has been a factor in the downfall of a long list of companies, Debenhams being the best known.
Alarmingly, this bid for Morrisons is happening at a juncture when food supplies are a national issue and shoppers are coming under severe financial strain.
Supermarkets face shortages on the shelves, inflation is on the rise, threatening bigger bills for customers and petrol is drying up.
Morrisons has a unique status in this country’s food supply, thanks to its relationships with farmers and its ownership of manufacturing sites, abattoirs, fishing fleets and egg farms. How long will this last, once the sharks sink in their teeth?
True, CD&R has given pledges on the supply chain and on other contentious matters such as the wages and pensions of more than 110,000 employees.
It has also tried to allay fears it will flog off Morrisons’ enviable estate of freehold properties or load up the business with debt.
No one should be taken in by these apparent reassurances which can easily be ripped up.
Taxpayers should also be concerned. CD&R has set up a shell company in the tax haven of the Caymans to run Morrisons.
The company says it will pay corporation tax and payroll levies here, which is no more than it should.
But it was only a matter of time, I felt, before the buyout sharks fixed their cold, hungry eyes on a household name company. It gives me not an ounce of pleasure to have been proved right
Even setting up this arrangement shows deep insensitivity when customers and staff face painful national insurance hikes and the Treasury needs every penny it can get.
Sir Terry, who will become the chairman of Morrisons, is widely regarded as retail royalty but his presence does not justify this avarice-fuelled sale, which will embolden the other circling sharks.
Asda is already controlled by the billionaire Issa brothers and private equity firm TDR Capital.
Sainsbury’s, where Czech tycoon Daniel Kretinsky has a big stake, is another potential target and even Tesco is seen in the City as vulnerable.
It is possible we could end up with almost our entire supermarket sector, with the exception of the Co-op, either in private equity hands or those of the German owners of discount chains Aldi and Lidl.
The Morrisons deal needs to pass a vote of shareholders on October 19. As the offer was 60 per cent above the share price before this drama kicked off, big City investors will be very tempted to agree.
But they, and the Morrisons board, should be under no illusions. This shameful sell-out to private equity is a bad deal at any price.