It shouldn’t take a bidding battle to realise that it matters who owns our firms and how they are run
It seems particularly ironic that one of the biggest takeover battles in years – a trio of American private equity firms tussling over who gets to buy supermarket chain Morrisons – should coincide with Wimbledon. For decades, economists defending the British model of capitalism would liken it to the summer fortnight in SW19 during which the UK hosted the world’s best tennis talent – almost none of which was homegrown. They even called it the “Wimbledon effect”. So what if the City was largely owned by Americans, the trains run by Germans and major airports in Spanish hands? The UK didn’t do national champions in business any more than it expected Tim Henman to beat Goran Ivanišević.
That is clearly changing. Kwasi Kwarteng, the business secretary and typically an avid free-marketeer, has this week demanded a meeting with Morrisons’ top brass over the £9.5bn bid that it has commended to shareholders. The buyout firm leading that offer, Fortress, has taken the unusual step of issuing a long letter full of commitments to the supermarket’s employees, suppliers and pensioners. The pledges are stuffed with phrases such as “fully supportive”, “does not intend” and “does not anticipate”. No doubt Fortress comes armed with the best of intentions; it evidently also employs diligent lawyers.