fter a weekend shootout, the deal is done: CD&R is buying Morrisons.
The winning 287p-a-share bid was just 1p above rival Fortress’s offer and represents a 61% premium to Morrisons’ undisturbed share price.
The chunky premium highlights the frenzied interest in the British supermarket sector and once again reignites the question: who’s next?
If Sainsbury’s were to go private, that would leave Tesco as the last publicly listed supermarket in Britain. Tesco’s near £20 billion market cap means a bid looks unlikely but in the current climate, you can’t rule it out.
That will be playing on the mind of Ken Murphy this week when he sets out his stall at Tesco.
The former Walgreens exec was an unknown quantity when he took over 12 months ago and has kept a low profile since then. Half-year results this Wednesday will be Murphy’s coming-out party: the Irishman will give a detailed outline of his vision for the supermarket for the first time.
Reports suggest Tesco will announce a £1.5 billion share buyback plan to keep investors sweet but the City will be looking for clarity on what Murphy plans to do inside the business too.
Predecessor Dave Lewis helped to right the ship after an accounting scandal — now investors want growth. It’s not obvious where that comes from now Tesco has offloaded its fast-expanding Asian businesses.
As well as the private equity interest, Tesco faces competition from checkout-free Amazon stores and 10-minute grocery apps like Getir and Gorillas. All retailers are currently struggling with inflation, supply chain issues, and a battle for staff.
Clearly, Murphy has a lot on his plate. No pressure, Ken.
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