Morrisons may be back on the stock market sooner than you think

At this hefty premium, Sir Terry will need to work hard to extract the double-digit returns that his buyout chums demand. One wonders how they will do it.

Legal & General Investment Management, one of the Square Mile’s prominent holier-than-thou institutions, warned Morrisons was at risk of falling prey to private equity “for all the wrong reasons”.

Sir Terry’s mob will undoubtedly need to think outside the box. But to give them their dues, they did manage that with B&M. Together they worked wonders on the discount retailer, turning it into one of Britain’s few retail success stories of recent times.

B&M, which floated in 2014, is now worth almost £6bn and won plaudits by offering customers what they really want; consumer brands at rock-bottom prices.

The fear is that Morrisons could instead go the way of Debenhams. Stuffed full of debt by its private equity owners during the noughties, the department store was doomed to failure as bosses were unable to adapt to changing high street trends. 

Worse still are the rumours circulating in the City.

It emerged last week that Motor Fuel Group, Britain’s biggest petrol forecourt operator and another of CD&R’s portfolio firms, was weighing a stock market float worth £5bn. One in one out, one might think. So what’s wrong with that?

According to those in the know, Motor Fuel Group has not been a good investment for CD&R. The US buyout fund has been trying to offload it for several years without success after spending hundreds of millions of pounds putting the business together.

But Morrisons could offer the investment firm a way out. Merge Motor Fuel Group with Morrisons and then float the bigger business, so the speculation goes. In other words, we could be looking at a scenario where Morrisons is flipped back on the public markets in short order.

Why? It would allow CD&R to dump its forecourt business on unsuspecting retail investors.

It is undoubtedly bold stuff. But if it came to pass, this would be the death knell for private equity’s public relations efforts. CD&R’s peers will be hoping that even Sir Terry does not have such brass neck.