Bankers ready £5 billion debt financing for Morrisons sale
By Claire Ruckin
LONDON (Reuters) - Bankers are working on debt financing packages of around 5 billion pounds ($8.35 billion) to back a potential sale of British supermarket chain Wm Morrison Supermarkets (MRW.L: Quote) to private equity funds, banking sources said on Wednesday.
The founding family of Morrisons, which own a 9.5 percent stake, 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 10 billion pounds, 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.
Bradford-based 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.
Morrisons' shareholders and retail analysts are doubtful that a take-private deal will happen but bankers and sponsors have been in talks for more than a month to see if the financing is theoretically possible, a second banker said. Continued...