Update of Wm Morrison Supermarkets PLC
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Clayton, Duville and Rice will provide additional support to Wm Morrisons’ pension fund if debt acquisitions “significantly undermine” retirement plans and then take over UK supermarket groups I agreed.
The New York-based group is one of two US private-equity funds competing to buy a grocery store with a £ 9.7 billion offer, committing additional Morrisons real estate to a pension fund as security, Bankruptcy event. He said he would maintain the scheme’s existing governance structure and share information with its trustees.
The proposal aims to overcome Opposition from the trusteeLeveraged buyouts said there was a risk of diminishing Morrisons’ ability to contribute to the scheme, and if the company went bankrupt, the pension fund could fall on the repayment priority list.
Council Chair Steve Southern was “happy” that CD & R was able to “provide the support and peace of mind” on Tuesday, and talks with private equity firms “Morrisons pension schemes.” “.
The trustee is “[continue] If the deal is signed, we will work with CD & R and Morrisons in the future to ensure that the interests of the system remain protected, “they said in a statement.
Buyout group Bidding war over several months Fortress, a private equity firm owned by Softbank, is about to buy Morrisons, which was listed in London over a century ago and has been in business for over 50 years.
CD & R, which is advised by former Tesco CEO Sir Terry Leahy, does not say which property was committed to security or how much it was worth. No information is specified that will be shared with the trustee under the new contract.
The trustee also refused to provide the details.
Both Morrisons’ two pension schemes are in the black on an ongoing funding basis. However, trustees are aiming for a scheme that will reach a funding level that will allow insurers to buy them or take over the payment of their pension promises. This eliminates the financial reliance on the company.
Based on this, the scheme was estimated to have a total deficit of £ 800 million last month. The CD & R plan aims to ensure that the scheme has the additional security needed to consider an acquisition.
“We are pleased that the fiduciary and CD & R have been constructively involved and have reached an agreement to protect their interests,” Morrisons Chairman Andrew Higginson said on the company’s board of directors.
However, independent pension expert John Ralph said CD & R should pay “heavy cash” rather than pledge assets to mitigate higher risks, which trustees pay. He said he should request it.
“It’s all very good that CD & R promises more assets to Morrisons’ two pension schemes, but in reality Morrisons went bankrupt and the trustees had to sell them on the open market. If so, its value is questionable, “said former pension Ralph. Advisor to the supermarket group.
Morrisons’ Board of Directors has agreed to recommend a 285p stake offer for CD & R, but Fortress, who bid on 270p stake and a 2p special dividend last month, could return with a higher offer. The UK Takeover Panel is planning an auction to settle the sale.
CD & R’s £ 9.7bn offer values Morrisons shares at around £ 7bn and net liabilities at £ 2.7bn. The company’s net debt at the end of January was £ 3.2 billion. CD & R expects to raise a total debt of £ 10.2bn.
CD&R wins over Morrisons pension trustees with property pledge Source link CD&R wins over Morrisons pension trustees with property pledge