Morrisons, the UK’s fourth-largest supermarket chain, is the subject of three competing private equity bids. It joins Asda, which was bought from Walmart in another private equity exercise earlier this year, and many more deals will probably be announced in this space in the next few years. The whole UK listed retail market now appears to be in play and it is not inconceivable that there might not be a single listed British supermarket left in the foreseeable future.

The plan is simple: buy a cash-generative company on a low valuation because earnings have been falling, use cheap financing, preferably someone else’s, to buy out the company. Then, once you have your hands on the target company, asset strip it completely by selling off and then leasing back any properties and plundering any pension fund surpluses...

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