Jul 25, 2022
How the Morrisons buyout turned into a nightmare for Goldman Sachs
The war set off an economic shock that would turn the Morrisons mega-deal from a dream ticket for the bankers into a nightmare. "It's the biggest fiasco since the Boots LBO," said one loan fund manager, referring to the 2007 leveraged buyout of the British pharmacy chain that left banks holding billions of pounds of debt as credit markets turned. Now, as central banks raise interest rates in an attempt to tame inflation, banks are struggling to sell deals they signed before the market turned. In the final months of 2021, 12 banks opted to join the original syndicate, taking Goldman and the other three banks' exposure down to just 10 per cent apiece. While the firm has partially bailed out lenders that funded its $5.8bn buyout of the building products group Cornerstone in the US, it has offered no assistance to the banks on Morrisons.
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