Non-executive fires Morrison for selling after accepting low-ball private-equity bid
Morrison’s independent directors have been dubbed ‘Stugs’ by the city’s magnates to support Fortress’ £6.3bn private equity bid.
The dedication has sparked outrage from Westminster and across the city. It claimed that Sir Ken Morrison, whose father founded the supermarket, may have been turning in his grave.
The 254p-per-share offering is lower than the price of supermarket shares three years ago, before the pandemic decimated their profits.
Criticism: Morrison’s non-executive directors, including Rooney Anand (pictured), have been branded ‘Stugs’ for supporting Fortress’ £6.3bn private equity bid.
But Morrison defended the bid, saying the New York-based investment firm’s offering represents a premium of 42 percent to its closing share price of 178p on June 18.
And with the stock trading at 262.7p, down 0.04 percent or 0.1p on the day, investors believe a higher bid will emerge.
Analysts at Canaccord Genuity said earlier this week that the board should have stayed for a higher offer of 314p-per-share, or £7.6bn.
And now the city’s two giants are calling on non-executives to ‘do their job’ and stand up for the interests of employees, shareholders and suppliers.
Bill Grimsey, a former Iceland chief executive who worked with Morrison’s chief executive Dave Potts at Tesco, said: ‘This deal is the ugliest face of capitalism, and the bid on the table doesn’t offer the right value for Morrison.
‘Do I think the non-executives are doing a good enough job? No. They should step up to the plate and decline the deal, or get better.’
Morrison defended the bid, saying Fortress’ offering represents a premium of 42 percent to its closing share price of 178p on June 18.
Labor peer and accounting expert Lord Sikka said: ‘Non-executives must stand up. They are supposed to provide independent oversight of the board but they are puppets of the executive directors.
‘They are appointed by the authorities and have no liberties, and this is shown again in Morrison.’
Non-executives have been instrumental in the great corporate defenses of the past 20 years – helping to stop retail tycoon Sir Philip Green’s opportunistic raid on Marks & Spencer in 2004 and defending AstraZeneca’s independence in 2004.
If shareholders vote for the deal Morrison’s executives will redeem the shares and bonuses – if the new owner wants to honor them – up to £34.7 million.
Non-executives, led by chairman Andy Higginson, could pocket another £750,000.
Higginson, who is paid £514,000 per year in fees and benefits, spent 13 years working with Potts on Tesco’s operating board.
His CV also includes an advisory role at the private equity firm Warburg Pincus, the money behind the successful Allied International bid for G4S. He has 126,402 shares worth £321,061 on the 254p offer.
Morrison’s other big non-executives include Rooney Anand, who led Green King in tough times to become Britain’s biggest campaigner. He owns 22,500 shares in Morrison, worth £57,150.
Kevin Havelock, chairman of the remuneration committee, was an executive at Unilever when he saw a private equity offer from Kraft-Heinz.
Other independent directors are Made’s chairman Susan Given, Sky executive Lisa McGowan and Rentokil’s former finance chief Jeremy Townsend.