Overseas investors may circle Morrisons due to weakened pound

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Morrisons Greene King Superdrug Li Ka-shing overseas investors Brexit
With a large freehold property estate and low debt, overseas investors are likely to approach Morrisons
// Morrisons is being eyed by overseas investors thanks to drop in the sterling
// Yesterday, Superdrug owner Li Ka-shing acquired pub & brewery chain Greene King for £2.7bn
// Analysts predict more overseas investors likely to look at moving into UK market

Morrisons is reportedly being inspected by overseas investors due to a drop in the sterling, driven by ongoing uncertainty around Brexit, according to analysts.

The grocer is considered a prime candidate for a potential takeover bid from an overseas private equity firm, as its share price continues to waver and the devaluation of the pound against other currencies is resulting in cheaper deals.

Yesterday, Superdrug owner and Hong Kong-based billionaire Li Ka-shing acquired pub and brewery chain Greene King for £2.7 billion, a deal which led to analysts predicting that an increased number of overseas investors could look into moving into the UK market.

“We are not suggesting Morrisons has had an approach, but sure as eggs are eggs, there are a vast array of investors looking at stable UK businesses at the moment,” Shore Capital head of research Clive Black said.

“We’ve seen a lot already – Greene King, Just Eat, Dairy Crest – and that won’t be the end of it.”

Morrisons has seen its share price fall by over 30 per cent in the last year, and with its large freehold property estate and low debt, overseas investors are likely to approach the business.

“Morrisons is a big company, as is Asda, but international private equity houses have got enormous sums of money,” Black said.

“As the value of sterling falls, trophy assets in the UK come into vogue.”

The news follows Morrisons falling behind its Big 4 rivals in yesterday’s Kantar grocery industry data, which saw the grocer’s sales drop 2.7 per cent, while its market share edged down by 0.2 per cent – from 10.3 per cent to 10.1 per cent.

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