Sunday 11 July 2021 9:47 am

Morrisons bosses set for bumper payday from private equity takeover

Three of Morrisons’ most senior executives are set to earn millions from the supermarket’s proposed private equity takeover as scrutiny grows over the deal.

Morrisons has accepted a £6.3bn takeover offer by a consortium of funds led by private equity firm Fortress — the latest in a growing frenzy of US buyouts of British firms.

Chief executive David Potts is set to make up to £19.6m from the deal if the supermarket’s board honours share awards granted to top executives, the Sunday Times reported.

He is guaranteed to receive a £9.2m payout from the shares he already owns.

Luke Hildyard, director of The High Pay Centre think tank, described the potential windfall as “vastly excessive”, adding the “pay for chief executives of listed companies is structured in a way that wildly over-estimates their importance”.

Chief operating officer Trevor Strain is set to earn a £3.6m payout, which could rise to £11.5m. Finance director Michael Gleeson will get £804,565, possibly rising to £3.7m.

The Morrison family, who are said to hold a stake of roughly 10 per cent, will see their shares valued at around £630m.

The takeover is the latest in a string of major private equity deals for British companies — including rival Asda — as US buyout groups move in on the City following the pandemic.

Fortress is being backed by Canadian pension giant CPPIB and a division of Koch Industries.

However, its bid could be derailed after rival Apollo said it was considering a potential offer. Morrisons had already rejected a bid by Clayton, Dubilier & Rice, another private equity firm.

Scrutiny is also mounting over the deal with Legal & General Investment Management (LGIM), one of Morrisons’ biggest shareholders, calling for more detail on the supermarket’s property portfolio before it casts its vote.

Chief executive Potts has also written to British farmers in a bid to calm fears that the deal could harm supply agreements, saying commitments from the US takeover group “carry genuine weight”, the Sunday Telegraph reported.

Potts will meet with business secretary Kwasi Kwarteng this week to explain the reasons behind accepting the deal and outline the company’s plan.