Private equity will to pounce on more UK firms, warns Sir Terry Leahy

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Private equity sharks will snap up more ‘undervalued’ UK household names, warns UK supermarket tycoon behind Morrisons deal

  • Ex Tesco chief Sir Terry Leahy led Clayton Dubilier & Rice’s buyout of Morrisons
  • Other firms mooted for takeover include Sainsbury’s, Marks & Spencer and BT
  • Boots owner appointed Goldman Sachs in early December to look for a buyer

By Mark Shapland For The Daily Mail

Published: | Updated:


The mastermind behind the Morrisons takeover has predicted that more household names could be taken private in the coming months.

Sir Terry Leahy – who led Clayton Dubilier & Rice’s buyout of the supermarket –believes that assets are undervalued on the London stock market leaving them vulnerable to private equity players and US giants.

Leahy made his name at Tesco where he was chief executive for 14 years, growing the company into the country’s biggest grocer.

Easy pickings: Sir Terry Leahy (pictured) believes many UK household names are undervalued making them vulnerable to private equity players and US giants

Other companies that have recently been mooted for takeover include Sainsbury’s, Marks & Spencer and BT.

Boots could be the biggest deal of them all after its owner appointed Goldman Sachs in early December to look for a potential buyer. 

A sale is expected to fetch north of £10billion. Leahy said: ‘UK equities are undervalued and require further investment. 

There’s questions over whether UK listed companies are at the right price and whether existing shareholders are rating them correctly.’

The comments will send shivers down the spines of boardrooms up and down the country, with US private equity giants Apollo and Fortress still understood to be on the lookout for assets.

Fortress lost out in its bid to buy Morrisons but partner Joshua Pack said in October: ‘The UK remains a very attractive investment environment from many perspectives and we will continue to explore opportunities to help strong management teams grow their businesses and create long-term value.’

Banking sources say Texas-based Pack should be taken seriously, adding that he has not retreated from the UK.

Clive Black, retail analyst at Shore Capital, said: ‘All these companies are in play, even Tesco is not too big. Private equity has access to an enormous amount of capital.’

Private equity takeover deals of UK companies have soared this year, reaching their highest level in 20 years.

So far vultures have spent £156billion in 2021, with firms like Vectura and Signature Aviation being snapped up.

Asda is also in private equity hands, a deal which has seen veteran Stuart Rose return to the spotlight as chairman.

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