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One of the world’s biggest buyout firms is weighing a spectacular £5.5bn takeover bid for Wm Morrison, Britain’s fourth-largest supermarket chain by market share.

Sky News has learnt that Clayton Dubilier & Rice (CD&R) is in the early stages of evaluating an offer for the grocer, a move that would send fresh shockwaves through the UK’s food retailing industry.

With a workforce of approximately 110,000 people, Morrisons is one of the biggest private sector employers in Britain.

CD&R is said to have begun approaching banks about financing a potential bid for Morrisons in recent days.

It is also understood to have made a preliminary approach to Morrisons’ board.

One source cautioned, however, that a formal bid for the grocer was far from certain and that the public disclosure of CD&R’s interest could force the project to be abandoned.

The Takeover Panel, which polices merger activity involving London-listed companies, is likely to seek clarification from CD&R and Morrisons about whether they are in discussions.

It is possible that the buyout firm would cease work on a deal rather than confirm it publicly, as has happened in other recent UK takeover situations, according to one source.

If it does progress, however, a bid could entail a dramatic re-emergence in Britain’s supermarket sector by Sir Terry Leahy, one of CD&R’s operating partners in Europe.

Sir Terry, who reigned over Tesco for 14 years before retiring in 2010, would be expected to play a key role in a bid.

If a deal is completed, it would potentially reunite Sir Terry with Andrew Higginson and David Potts, Morrisons’ chairman and chief executive respectively, who both spent much of their careers at Tesco.

Further details of CD&R’s interest in Morrisons were unclear this weekend, although based on a conventional takeover premium, any offer would value the company at £5bn or more.

It was also unclear whether CD&R’s interest was being pursued on a standalone basis, or with a strategic or financial partner.

Morrisons had a market value at Friday’s closing share price of £4.3bn, with significant value still remaining in its freehold property portfolio.

Its shares have remained broadly flat during the last year, and are roughly midway between their peak and trough over that period.

Morrisons has a grocery market share of just over 10%, trailing third-placed Asda on 14.4%, according to Kantar, the market research group.

A takeover by CD&R would be the latest seismic deal in Britain’s grocery sector.

In 2019, J Sainsbury and Asda abandoned their attempt to merge into a £15bn retail group after it was blocked by the Competition and Markets Authority (CMA).

That decision spurred Asda’s owner, Walmart, to kick off an auction of the third-biggest supermarket by market share.

Last September, a consortium comprising TDR Capital and EG Group, the petrol stations giant controlled by Mohsin and Zuber Issa, was selected as the preferred bidder for Asda in a £6.8bn deal.

Their takeover was approved by the CMA this week after agreeing to sell 27 Asda petrol stations.

Asda’s new owners are now engaged in the search for a new chief executive to replace Roger Burnley, who will step down in the coming months.

CD&R ranks among the world’s largest private equity investors, having raised $16bn for its latest buyout fund earlier this year.

In the UK, it has been a prolific acquirer of large businesses, including B&M Retail, the discount chain which is now a publicly quoted company, and Motor Fuel Group (MFG), the petrol forecourt operator.

It has also participated in the recent frenzy of private equity bidders for London-listed companies, agreeing a £2.6bn takeover of the pharmaceuticals group UDG Healthcare several weeks ago.

The US-based buyout firm is regarded as a supportive long-term investor in the companies it backs, frequently building significant multibillion dollar enterprises from relatively small initial purchases.

People who have worked with CD&R in the UK say it significantly increased employment at companies including B&M and MFG after investing in their growth.

CD&R is said to have been attracted to Morrisons’ strong balance sheet and management team, although Mr Potts, 64, is expected to retire in the next few years.

The company was founded in 1899 by egg and butter merchant William Morrison at a stall in Bradford Market, it opened its first shop in 1958.

Its maiden supermarket followed three years later and in 1967, it floated on the stock exchange, preceding an unbroken 35-year run of sales growth which ultimately took it into the FTSE-100 index in 2001.

By then, Sir Ken Morrison, William’s son and the company’s veteran boss, had been knighted and in 2004 he engineered the most audacious move in Morrisons’ history: the £3bn takeover of Safeway which transformed it into a major nationwide grocery retailer.

Sir Ken stepped down as chairman in 2008, and he died in 2017 at the age of 85.

Morrisons’ performance stuttered under Dalton Phillips, who was ousted in 2015, leading to the appointment of Mr Potts.

Alongside Mr Higginson, the chief executive has engineered an impressive turnaround, and has signalled that more cash will be returned to shareholders as business normalises in the aftermath of COVID19.

CD&R’s interest in the chain is not the first time that a prospective buyer has examined an offer for Morrisons.

Amazon has been repeatedly rumoured as a suitor, with Morrisons established as a supplier of food products to the online behemoth’s Prime Now and Pantry customers.

Earlier this month, Morrisons was on the receiving end of one of the biggest shareholder revolts in UK corporate history when 70% of investors voted against its pandemic pay packages.

City institutions rebelled over its remuneration committee’s use of discretion to override the exceptional costs incurred by the coronavirus crisis.

Morrison’s saw annual profits slump to £201m last year, having decided – along with other big supermarkets – to hand back £230m in business rates relief to the government.

However, it has predicted that profits will rebound sharply this year and next as COVID-related costs subside.

This week, Tesco warned that sales are likely to fall as shopping behaviour returns to pre-pandemic levels.

CD&R and Morrisons both declined to comment on Saturday.

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New electric car grants of up to £3,750 aims to drive sales

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New electric car grants of up to £3,750 aims to drive sales

The taxpayer is to help drive the switch to non-polluting vehicles through a new grant of up to £3,750, but some of the cheapest electric cars are to be excluded.

The Department for Transport (DfT) said a £650m fund was being made available for the Electric Car Grant, which is due to get into gear from Wednesday.

Users of the scheme – the first of its kind since the last Conservative government scrapped grants for new electric vehicles three years ago – will be able to secure discounts based on the “sustainability” of the car.

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It will apply only to vehicles with a list price of £37,000 or below – with only the greenest models eligible for the highest grant.

Buyers of so-called ‘Band two’ vehicles can receive up to £1,500.

The qualification criteria includes a recognition of a vehicle’s carbon footprint from manufacture to showroom so UK-produced EVs, costing less than £37,000, would be expected to qualify for the top grant.

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It is understood that Chinese-produced EVs – often the cheapest in the market – would not.

BYD electric vehicles before being loaded onto a ship in Lianyungang, China. Pic: Reuters
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BYD electric vehicles before being loaded onto a ship in Lianyungang, China. Pic: Reuters

DfT said 33 new electric car models were currently available for less than £30,000.

The government has been encouraged to act as sales of new electric vehicles are struggling to keep pace with what is needed to meet emissions targets.

Challenges include the high prices for electric cars when compared to conventionally powered models.

At the same time, consumer and business budgets have been squeezed since the 2022 cost of living crisis – and households and businesses are continuing to feel the pinch to this day.

Another key concern is the state of the public charging network.

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The Chinese electric car rivalling Tesla

Transport Secretary Heidi Alexander said: “This EV grant will not only allow people to keep more of their hard-earned money – it’ll help our automotive sector seize one of the biggest opportunities of the 21st century.

“And with over 82,000 public charge points now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”

The Government has pledged to ban the sale of new fully petrol or diesel cars and vans from 2030 but has allowed non-plug in hybrid sales to continue until 2025.

It is hoped the grants will enable the industry to meet and even exceed the current zero emission vehicle mandate.

Under the rules, at least 28% of new cars sold by each manufacturer in the UK this year must be zero emission.

The figure stood at 21.6% during the first half of the year.

The car industry has long complained that it has had to foot a multi-billion pound bill to woo buyers for electric cars through “unsustainable” discounting.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the grants sent a “clear signal to consumers that now is the time to switch”.

He went on: “Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade.”

But the Conservatives questioned whether taxpayers should be footing the bill.

Shadow transport secretary Gareth Bacon said: “Last week, the Office for Budget Responsibility made clear the transition to EVs comes at a cost, and this scheme only adds to it.

“Make no mistake: more tax rises are coming in the autumn.”

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City financier Kolade joins ranks of Channel 4 chair contenders

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City financier Kolade joins ranks of Channel 4 chair contenders

A leading financier and Conservative Party donor is among the contenders vying to chair Channel 4, the state-owned broadcaster.

Sky News has learnt from Whitehall sources that Wol Kolade has been shortlisted to replace Sir Ian Cheshire at the helm of the company.

Mr Kolade, who has donated hundreds of thousands of pounds to Tory coffers, is said by Whitehall insiders to be one of a handful of remaining candidates for the role.

A recommendation from Ofcom, the media regulator, to Culture Secretary Lisa Nandy about its recommendation for the Channel 4 chairmanship is understood to be imminent.

Mr Kolade, who heads the private equity firm Livingbridge, has held non-executive roles including a seat on the board of NHS Improvement.

He declined to comment when contacted by Sky News on Monday.

His candidacy pits him against rivals including Justin King, the former J Sainsbury chief executive, who last week stepped down as chairman of Ovo Energy.

Debbie Wosskow, an existing Channel 4 non-executive director who has applied for the chair role, is also said by government sources to have made it to the shortlist.

Sir Ian stepped down earlier this year after just one term, having presided over a successful attempt to thwart privatisation by the last Tory government.

The Channel 4 chairmanship is currently held on an interim basis by Dawn Airey, the media industry executive who has occupied top jobs at companies including ITV, Channel 5, and Yahoo!.

The race to lead the state-owned broadcaster’s board has acquired additional importance since the resignation of Alex Mahon, its long-serving chief executive.

It has since been reported that Alex Burford, another Channel 4 non-executive director and the boss of Warner Records UK, was interested in replacing Ms Mahon.

Ms Mahon, who was a vocal opponent of Channel 4’s privatisation, is leaving to join Superstruct, a private equity-owned live entertainment company.

The appointment of a new chair is expected to take place by the autumn, with the chosen candidate expected to lead the recruitment of Ms Mahon’s successor.

The Department for Culture, Media and Sport declined to comment on the recruitment process.

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Premier League club Brentford to sell stake at £400m valuation

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Premier League club Brentford to sell stake at £400m valuation

The owner of Brentford Football Club has clinched a deal to sell a minority stake in the Premier League side to new investors at a valuation of roughly £400m.

Sky News has learnt that an agreement that will involve current owner Matthew Benham offloading a chunk of his holding to Gary Lubner – the wealthy businessman who ran Autoglass-owner Belron – is expected to be announced as early as Tuesday.

Matthew Vaughn, the Hollywood film-maker whose credits include Layer Cake and Lock, Stock and Two Smoking Barrels, is also expected to invest in Brentford as part of the deal, The Athletic reported last month.

Further details of the transaction were unclear on Monday night, although one insider speculated that it could ultimately see as much as 25% of the club changing hands.

If confirmed, it would underline the continuing interest from wealthy investors in top-flight English clubs.

FA Cup winners Crystal Palace have seen a minority stake being bought by Woody Johnson, the New York Jets-owner, in the last few weeks, with that deal hastened by the implications of former shareholder John Textor’s simultaneous ownership of a stake in French club Lyon.

Sky News revealed in February 2024 that Mr Benham had hired bankers at Rothschild to market a stake in Brentford.

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Under Mr Benham’s stewardship, it has enjoyed one of the most successful transformations in English football, rising from the lower divisions to the top division in 2021.

It has also moved from its long-standing Griffin Park home to a new stadium near Kew Bridge.

This summer is proving to be one of transition, with manager Thomas Frank joining Tottenham Hotspur and striker Bryan Mbeumo the subject of persistent interest from Manchester United.

Brentford did not respond to a request for comment on Monday night, while a spokesman for Mr Lubner declined to comment.

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