MP questions watchdog’s ability to protect UK jobs in private equity deals | Competition and Market Authority


The head of an influential committee of MPs has raised concerns about regulators’ ability to protect jobs and customers during a spate of private equity takeovers of key UK companies after Morrisons became one of the youngest publicly traded companies to receive a takeover bid.

Darren Jones, Chair of the Business, Energy and Industrial Strategy Selection Committee, has written to the Competition and Markets Authority (CMA) asking the regulator to clarify its powers to intervene “when new owners act irresponsibly”.

Jones said concerns had been raised following Asda’s recent private equity backed buyout and approach to Morrisons. Such deals come after the collapse of companies like Debenhams, where debt has been amassed under private equity ownership, and Casual Dining Group, the private equity-backed former owner of Bella Italia and Café Rouge, who entered the US last year Administration got, closely watched.

“With previous purchases of high street, highly leveraged brands that have ultimately resulted in administrative losses, job losses and pension fund shortages, there is concern that regulators have insufficient oversight or authority to intervene when new owners act irresponsibly,” Jones wrote to the CMA managing director Andrea Cocelli.

He asked Coscelli for advice on what powers are available to solve such problems and what other powers should be considered to solve these problems.

Jones said: “UK supermarkets are the newest area of ​​interest to private equity and other buyers who are running on significant debt. Some stakeholders have raised concerns about what this could mean for job protection, pension funds and the presence of supermarkets on main UK streets.

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“Although the level of activity is currently low, I am very interested in understanding what regulatory oversight is in place to ensure that future transactions protect consumers and workers.”

Private equity firms have announced 113 deals for UK companies, including acquisitions and minority stakes, totaling £ 23.3 billion in 2021, according to data firm Dealogic, the fastest transaction pace since 2007, just before the financial crisis.

US buyout firm Bridgepoint has taken a minority stake in Itsu, the Asian-inspired grocery chain, while other destinations include St. Modwen Properties and the private jet company Signature Aviation.

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