Morrisons Shares Surge 5% on Founder Family Buyout Interest

WM Morrisons shares rocketed by over 5% at the market open after rumours circulated that the British grocer's founding family is gauging whether to buy it out.

Morrisons' stock price hit 247.20p on the opening of the London Stock Exchange and recouped some of its major losses over the last month.

According to a report by Bloomberg, the family approached private-equity funds CVC Capital Partners, Carlyle Group, and Apax Partners to weigh their interest in taking the retailer private.

However, according to Bloomberg's unnamed sources, Apax had decided not to pursue a deal and the family, which holds about 9.5% of the supermarket, has so far been "unable to find a buyout partner due to concerns about Morrisons' slow sales growth and the size of the deal."

Morrisons' Issues

A range of issues has hit Morrisons over the last six weeks, including an insider trading scandal and dire Christmas sales.

In early January, Morrisons shares tanked by as much as 6% on an ominous trading update from the British supermarket warning it had a "very challenging" Christmas period.

The firm said like-for-like sales fell 5.6% in the six weeks to 5 January, excluding fuel. This drop sharpens to 7.1% including fuel sales. Total sales were down 1.9% excluding fuel, with a 3.3% including fuel.

It blamed tough times for UK consumers, whose incomes have been in real terms decline as prices rise faster than wages, and its failure to keep up with the growing importance in the grocery market of online, convenience stores and targeted couponing.

Meanwhile, Morrisons' head of tax Paul Coyle was arrested under an insider dealing probe by the Financial Conduct Authority.

The arrest is alleged to be around the £216m (€262m, $355m) deal between Morrisons and online grocer Ocado. No charges have been made and the FCA would not comment.

Morrisons also declined to comment.