One of the architects of Thatcherism has damned Morrisons’ suitors as ‘vulture capitalists’ keen to asset strip the grocer.
Lord Vinson, 90, who co-founded the Centre for Policy Studies with Margaret Thatcher, said a private equity buyer would look to extract £1billion from its property portfolio.
The Tory peer believes staff at Morrisons supermarkets should be ‘really frightened’ by the prospect of the grocer losing its independence, adding it will ‘leave this country poorer’.
Tory peer Lord Vinson, who co-founded the Centre for Policy Studies with Margaret Thatcher (pictured), said the former Prime Minister ‘wouldn’t have liked’ Morrisons’ private equity deal
He demanded Business Secretary Kwasi Kwarteng step in, adding that even Mrs Thatcher would have ‘disliked’ the deal.
The comments came as Clayton Dubilier & Rice (CD&R), under the former Tesco boss Terry Leahy, prepares to raise its bid for Morrisons and overtake the consortium led by Fortress, which upped its offer to £6.7billion, or 272p per share, last week.
Lord Vinson said: ‘Mrs Thatcher might have said “It’s the market and you take the rough with the smooth”, but fundamentally she wouldn’t have liked it.
‘It doesn’t bring any benefit except to the bidders. I’m all for free markets and free trade, but there comes a point where it should be conducted within a moral framework.
There is only one reason for US vulture capital’s interest in Morrisons, they want to trouser a billion pounds. They want to take money out of the business by asset-stripping.’
He added: ‘We’ve seen it happen so often, as with Debenhams. Why can’t somebody in the Government say: “We don’t like the look of this?”’
He called for all takeover bids over a certain size to be referred to a beefed-up Competition and Markets Authority.
A series of big City and Westminster names including former Iceland boss Bill Grimsey, Darren Jones, the chairman of the MPs’ business committee, and Labour peer Lord Sikka have raised concerns.
Fortress, whose bid has been recommended by Morrisons’ board, has pledged to protect jobs and maintain a substantial chunk of the property portfolio.
The promises are not legally binding. Sources have suggested that CD&R, which also owns B&M, will publish its own pledges when it returns with a fresh bid.
Fortress said: ‘We are focusing on long-term sustainable value creation and place very significant emphasis on the wider responsibilities of ownership.’
Analysts say a sale of assets is likelier if the price rises above 270p a share, as a buyer seeks to claw back its investment.
On Monday, the Takeover Panel confirmed an extension to the deadline for CD&R to bid to 5pm on August 20.
The date for shareholders to vote on Fortress’s offer has been pushed back 11 days – to August 27.
Architect of free enterprise
Lord Vinson became a key architect of Thatcherite thinking on the economy
Lord Vinson, 90, became a key architect of Thatcherite thinking on the economy and business after making his fortune as a plastics industrialist.
The son of a farmer, he was educated at Pangbourne and started his first business Plastic Coatings, after a spell in the army, at the age of just 21.
The business listed 18 years later on the London Stock Exchange earning the industrialist his fortune.
Vinson entered politics in the 1970s co-founding the Centre for Policy Studies with Margaret Thatcher, leading her to credit him with helping to ‘win the intellectual argument in favour of free enterprise’.
The think tank broke the post war consensus of Keynesianism and championed economic liberalism instead.
He was a director of Barclays bank from 1979 to 1986, and was elevated to the House of Lords in 1985.
