Morrisons must be protected from the ‘asset strippers’ - Ros Snowdon

US private equity firm, Clayton, Dubilier & Rice (CD&R), has been sent packing by the Bradford-based Morrisons board, which has firmly rejected the potential £5.5bn bid saying it “significantly undervalued Morrisons and its future prospects”.

However, CD&R could well make a higher offer or could even flush out other bidders. “Morrisons brought to you by Amazon” just doesn’t have the same authentic Yorkshire ring to it.

Make no mistake about this. Private equity buyers will have their eye on the prize - Morrisons’ top notch freehold estate.

Morrisons owns 85 per cent of its stores, way higher than the average 60 per cent, and you can bet your bottom dollar that CD&R wants to flog it off and bag the profits.

Yorkshire has already seen what American buyers can do to a great grocer. Leeds-based Asda was held in the same esteem as Morrisons before the world’s biggest retailer, Walmart, gobbled it up and bled it dry of profits and top talent.

So what do Morrisons’ institutional investors make of a possible US takeover? They don’t like it one little bit. Far from wanting to cash in on a tidy short term profit, they want Morrisons to recover from the pandemic and earn them long term cash.

One major Morrisons shareholder, Legal & General, has slammed the proposal. It said the grocery sector generally looks undervalued and private equity are interested in Morrisons partly because it has a lot of freehold property which they would ‘sale and leaseback’ to generate cash for themselves.

A senior Legal & General fund manager said: “That’s not adding any genuine value and the company could do that themselves.”

Yorkshire MPs, both red and blue, have to stand up and be counted here.

Morrisons has facilities scattered across the UK from Scotland to the Cornish constituency of Environment Secretary, George Eustice. A little known fact is that most of Morrisons’ operations are in Tory held seats.

However, not all of them are. Labour MP Mark Tami, whose Welsh constituency includes a plant where Morrisons employs over 1,000 people, said a private equity buyout would be bad for jobs and British farming.

He told the Guardian: “There’s no mistaking this for anything other than an attempt to asset strip a good business for short term profit.”

The Labour party and the National Farmers Union have raised alarm bells over a private equity buyout of Morrisons and what it could mean for jobs. Morrisons has about 500 stores and 118,000 staff, making it one of the country’s biggest private sector employers.

Labour has called on the Government to confirm it will intervene in any takeover to secure binding commitments about the buyer’s plan for jobs and pensions. They need to be binding, mind you. Kraft Foods made all sorts of promises when it took over Cadbury, only to tear them up within weeks.

The Government has the powers to intervene in any British takeover on grounds including competition, national security and pandemic response.

However, Labour wants the Government to have powers to intervene where an acquisition may have long term implications for the UK’s industrial strategy.

It is now time for the Tories to get their heads out of the sand and make a stand for a retailer that was founded by William Morrison in 1899 as an egg and butter stall in Bradford. His son, Sir Ken Morrison, took over at the age of 21 and subsequently turned Morrisons into a “top four” grocer.

The customers, staff, plus their friends and families, at Morrisons’ Heckmondwike store will be paying close attention to what the politicians say before they head off to the polls for the Batley and Spen by-election next week.