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Private equity firms could be eyeing Morrisons again

Private equity firms may again be considering a move for Morrisons. According to a report by the International Business Times, City analysts believe interest in the struggling supermarket business could be re-ignited following yesterday’s figures from Kantar Worldpanel that suggested that sales performance at the chain was stabilising. .

Edmund Shing of the Opportunité Idle Investor Fund is quoted as saying: "If we're finally seeing some stability in sales that could be a sign that a private equity group might be willing to team up with the [Morrison] family."

The retailer’s founding family, who together own around 10% of Morrisons' stock, were reported last year to be interested in backing a private equity buy-out led by funds such as CVC or Carlyle Partners as group’s share price plummeted in the wake of weakening performance. Shing added: “Private equity firms have a shed load of money to invest and there is a big shareholder in the form of the Morrison family to team up with. As long as the sales keep sliding, people think it’s a bottomless pit, but when you have stabilisation, it could be an initial sign of change. New management could be stabilising the ship, and the investment is going in now, so private equity are thinking some of the hardest slog is already done.”

Morrisons’ share price stood at over 250p two years ago, but is now trading at around 170p, potentially increasing its appeal to private equity firms. The group also still owns vast majority of its property portfolio, which significantly adds to its value in the eyes of investors.

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