Dec 2, 2021
CD&R delays plan to raise £6.6bn debt to fund Morrisons buyout
Clayton, Dubilier & Rice has delayed plans to raise £6.6bn in debt to finance its buyout of supermarket chain Wm Morrison, the UK's biggest take-private deal in more than a decade. Some would-be investors had expressed concerns about Morrisons' debt before the delay, which was first reported by Bloomberg. One junk bond investor said last month that the Morrisons financing was "One step too far", noting that the £6.6bn debt was not far off the company's entire £7.6bn enterprise value in June, before a bidding war pushed up its share price this summer. The Morrisons fundraising is the latest in a series of high-yield bond issuances to be delayed after the emergence of the new variant of coronavirus, which has raised fears of an economic slowdown that might leave lower-rated companies struggling to service their debts. Credit market observers expected that the Morrisons package would overtake Asda's £2.75bn fundraising in February as the UK's largest-ever high-yield debt issue.
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