Former Tesco CEO Leahy Named As Potential Future Morrisons Chairman
Former Tesco chief executive Sir Terry Leahy is reportedly being lined up to become the next chairman of Morrisons, should the £7 billion (€8.15 billion) takeover offer from Clayton Dubilier & Rice (CD&R) be successful.
The Telegraph reported that Leahy, who is currently a senior adviser at CD&R, is in 'pole position' to takeover as chairman of the UK supermarket group if the deal is completed.
This would mean that David Potts, Morrisons chief executive, would again be working alongside his former boss. Leahy led Tesco for 14 years, spearheading the retailer's move into many international markets during a period of rapid growth.
The Telegraph also reported that two CD&R executives that are involved in the Morrisons takeover deal, Marco Herbst and Gregory Lai, would also likely take a place on the retailer's board in the event of a successful deal.
Commenting on CD&R's improved offer for Morrisons, which was accepted by the retailer last week, Third Bridge analyst, Ross Hindle said that the new offer "highlights the value within Morrisons, whose farm-to-fork model differentiates the Group vs the other big 4 UK grocers.
"While many hail vertical integration as a Morrisons' differentiator, offering provenance, traceability, freshness, and price flex', it also means the supermarket can’t shop around for value. Which, in today's world of supply chain challenges and cost inflation, does hinder the group."
Hindle added that whoever is successful in taking over Morrisons is likely to offload a number of stores. "Given c.10% of Morrisons stores are loss-making, it could prove a strategic way to improve the store portfolio while paying back debt," he said.
Elsewhere, Danni Hewson at AJ Bell said that while rival bidder Fortress was an early favourite to take over Morrisons, "Clayton, Dubilier and Rice always seemed like the more natural fit for the Yorkshire business."
Hewson noted that Leahy has already sought to highlight his relationship with the late Sir Ken Morrison, seeking to boost shareholder sentiment.
"But ultimately this is a numbers game and in business sentiment often only goes so far," she noted.