UK High Street under renewed assault

The private equity industry is once more turning to UK-based consumer businesses to put its money to work with bids rumoured for Morrisons, a besieged national grocer, and Matalan, a troubled discount retailer.

A consortium of Texas Pacific, CVC and Permira, three buyout groups, is eager to engage with the board of Morrisons, a UK supermarket chain, about a £6 billion bid to take the company private while the founder of Matalan, a discount retailer, is also preparing a bid to buy back his firm.

Newspaper reports say a bid for for Morrisons would come as it continues to try to turnaround its fortunes after a difficult few years, since acquiring rival Safeway for £3bn in 2004.

Morrisons has issued a number of profit warnings, and in March of this year it posted its first ever annual loss – £312.9m. The grocer’s chairman Sir Ken Morrison is handing over day-to-day control at the firm to new chief executive Marc Bollard in September.

Meanwhile, shares in Matalan have climbed as the market digested news that the discount fashion store’s founder John Hargreaves is considering a buyout bid.

Matalan said after Friday’s close that Mr Hargreaves, its chairman and 53% shareholder, was working on a possible offer. Shares were up more than 3% at 175p in morning trading.