Non-executives at Morrisons come under fire for sell-off after accepting low private equity offer
The city’s grandees have called Morrison’s independent directors “stooges” for supporting Fortress’ £ 6.3 billion private equity offer.
The surrender has sparked outrage across Westminster and the City. It led to allegations that Sir Ken Morrison, whose father founded the supermarket, was turning over in the grave.
The offer of 254 pence per share is lower than the price asked of the supermarket’s shares three years ago, before the pandemic hurt its profits.
Criticism: Morrisons ‘non-executive directors, including Rooney Anand (pictured), have been branded “stooges” for supporting Fortress’ £ 6.3 billion private equity offering
However, Morrisons has defended the offer, stating that the New York investment firm’s offer is a 42 percent markup on its closing price of 178 pence on June 18.
And the stock is trading at 262.7p, down 0.04 percent, or 0.1p on the day, suggesting investors believe a higher supply will emerge.
Canaccord Genuity analysts said earlier this week that the board should have endured a higher offer of 314p per share, or £ 7.6 billion.
And now two veterans of the city have demanded that non-executives “do their jobs” and stand up for the interests of employees, shareholders and suppliers.
Bill Grimsey, former CEO of Iceland who worked with Morrisons CEO Dave Potts at Tesco, said, “This deal is the ugliest face of capitalism, and the offer on the table doesn’t offer Morrisons the right value.
“Do I think the non-executives are doing their job well enough? No. You should step on the table and reject the deal or get a better one. ‘
Morrisons has defended the offer, stating that Fortress’s offer represents a 42 percent premium on its closing price of 178 pence on June 18
Lord Sikka, a Labor peer and accounting expert, said: “The non-executives should stand up. They are supposed to supervise the board independently, but are the assistants of the managing directors.
“They are appointed by the executives and they have no independence, and that showed again at Morrisons.”
Non-executives have been instrumental in the great corporate defense of the past 20 years – helping stave off retail magnate Sir Philip Green’s opportunistic raid on Marks & Spencer in 2004 and protecting Astrazeneca’s independence in 2004.
If shareholders vote for the deal, Morrisons executives will pay out shares and bonuses – should the new owner honor them – of up to £ 34.7 million.
Non-executives led by Chairman Andy Higginson could pocket an additional £ 750,000.
Higginson, who receives £ 514,000 a year in fees and benefits, worked alongside Potts on Tesco’s board of directors for 13 years.
His résumé also includes an advisory role at the private equity firm Warburg Pincus, the sponsor for the successful takeover of Allied International for G4S. He holds 126,402 shares valued at £ 321,061 in the 254p offer.
Morrison’s other notable non-executive includes Rooney Anand, who led Greene King through troubled times to become Britain’s greatest host. He holds 22,500 shares of Morrisons valued at £ 57,150 at the Offer Price.
Kevin Havelock, Chairman of the Compensation Committee, was an executive at Unilever when the company rejected a private equity offer from Kraft-Heinz.
The other independent directors are Susanne Given, the chairwoman of Made, Sky executive Lyssa McGowan and Jeremy Townsend, the ex-CFO of Rentokil.