Ever since Morrisons was put “in play” more than a fortnight ago, investors have been betting on a bidding war. That looks to have arrived.
News that the UK supermarket has accepted a £9.5bn bid (including debt) from a consortium led by the US buyout giant Fortress is unlikely to be the end of the matter as the elbow-barging begins in earnest .
The aggressive New York fund Apollo has now registered interest; and the first bidder to declare its hand publicly, Clayton Dubilier & Rice, may yet return with a higher offer.
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“Four Sundays”
Given Morrisons’ key role as “a cornerstone of the UK’s food-supply infrastructure”, there’s obvious concern about the Bradford-based supermarket’s future in the hands of American buyout barons, says The Guardian.
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Wes Edens, the financier behind Fortress, owns Aston Villa FC, but is little known in Britain outside Birmingham. Moreover, eyebrows have been raised about a junior partner on the Fortress deal, Koch Industries. The huge private company is run by the conservative-leaning Koch family, famed for cheerleading the Tea Party movement of a decade ago and donating “to groups denying climate change” – perhaps not natural bedfellows for a grocer trading on its cosy wholesomeness.
Fortunately, Edens’ reputation at Villa is very far from that of the stereotypical raider, says Birmingham Live. Held in “high regard” by fans, he is credited with saving the club from bankruptcy in August 2019 and has since devised “an incredible $1.6bn blueprint” to put it on the path to “sustainable success”.
Following two years of management by this “shrewd and successful” businessman, Villa’s value has more than trebled to £341m, according to Transfermarkt. Aston fans aren’t the only ones singing Edens’ praises. The sports enthusiast is also co-owner of the Milwaukee Bucks basketball team, which has also enjoyed a renaissance on his watch.
The son of a psychologist and schoolteacher Edens, 59, “grew up on a ranch in Montana and spent most of his childhood outdoors”, says The Wall Street Journal. In his teens he was a competitive ski racer. After taking a degree in finance and business from Oregon State University, he joined a small bank in San Francisco in 1984 before heading for Wall Street – landing a job there and moving to BlackRock in 1993.
In 1998, he quit with two colleagues to start Fortress, making history in 2007 when it became “one of the first private-equity funds to go public”, giving Edens a stake worth $2.3bn. Within a year, the firm was almost wiped out by the financial crisis, despite Edens’ efforts to keep it afloat. “If I ever wrote a book about 2008, I’d call it ‘Four Sundays’,” he says, “because I worked every day that year except four Sundays.”
Fortress was eventually bought by SoftBank in 2017 – a “surprising move” for the usually tech-focused Japanese investment group, says The Guardian.
Seeing things as they are
Edens himself has always liked “a counter-intuitive bet”, notes The Wall Street Journal. Well known for diving back into subprime lending when the financial crisis had only just abated, he happily bought a basketball team that hadn’t won a championship for half a century.
“What I want to do is see things for what they are, not how other people see them,” he once observed – a down-to-earth philosophy that one imagines would go down well in Bradford.
