LONDON: Bankers are working on debt financing packages of around £5bn ($8.35bn) to back a potential sale of British supermarket chain Wm Morrisons Supermarkets to private equity funds, banking sources said yesterday.
Morrisons, which is 9.5 percent owned by the founding family, has contacted buyout firms to guage their interest in taking the business private after a fall in Christmas sales. Cash-rich private equity firms are keen to do new buyouts after low levels of M&A activity in 2013, although the large size of this deal may mean that they have to work together, bankers said.
“The size of the transaction, which could get as high as £10bn, could require a number of private equity players to team up, given the size of the equity cheque needed,” a senior leveraged loan banker said.
Morrisons declined to comment. Morrisons, which is the UK’s fourth-largest supermarket operator, was founded in 1899 and listed on the London Stock Exchange in 1967.
Morrisons, which has lucrative property assets, has already been considered as a takeover target by CVC, which studied a potential bid in 2007.
A debt package of around £5bn would be one of the largest buyout financings since the financial crisis. Reuters
