Who are the American investors making a move on Morrisons?

£6.3bn bid is led by Majestic Wine controller Fortress, with junior partner Koch Industries

The potential new owners of Morrisons are based a long way from the supermarket’s headquarters in Bradford, Yorkshire.

Koch Industries, one of the deal’s key backers, was founded by two of America’s richest men, Charles Koch and his younger brother David, whose shares were inherited by his widow and children upon his death in 2019. The combined family net worth is thought to top $100bn. The company is now involved in a vast array of interests from energy and chemicals to finance and electronics and cattle ranches.

An investigation by the environmental group Greenpeace found the Kochs had donated to groups denying climate change, while they have ploughed hundreds of millions of dollars into an array of conservative interests including the US Republican party. In the UK, the Kochs have been involved in funding the hard right but the little-known magazine Spiked.

Koch Industries is a junior partner in the Morrisons deal to New York-based Fortress, which is thought to be putting up about half the £3bn equity for the Morrisons bid. Started as a private equity firm in 1998, among its founders are the Aston Villa owner Wesley Edens, who has developed a reputation for putting fresh investment into the Midlands club.

Also the owner of the Milwaukee Bucks basketball team, he established the firm alongside the bankers Robert Kauffman and Randal Nardone to focus on acquiring undervalued or distressed companies, invest in bonds, hedge funds and to make property market acquisitions.

The group has about $53bn (£38bn) under management on behalf of 1,800 institutional clients and private investors.

The first US alternative investment firm to float on the New York Stock Exchange, in 2007, Fortress was bought out by Japan’s SoftBank in a $3.3bn deal in 2017. It was a surprising move for the giant investment group, which has tended to focus on the technology sector.

The move on Morrisons, a cornerstone of the UK’s food supply infrastructure during the disruptions of the pandemic and Brexit, marks a second tilt by the SoftBank empire at a highly sensitive British business. In 2016, SoftBank acquired the Cambridge computer chip firm ARM. Still regarded as the UK’s leading tech company, its designs are used in the iPhone.

Fortress is best known for investing in distressed businesses but bought United Pacific, a petrol forecourts business that runs convenience stores including Circle K, in 2013 and snapped up a variety of US supermarkets and some of the failed Fresh & Easy chain that Tesco tried to set up over the Atlantic.

The group made its first big move into the UK with the £95m acquisition of the wine dealer Majestic Wine in late 2019. It has laid out ambitious expansion plans for Majestic’s high street division.

Since it was taken private by SoftBank, Fortress has not been required to publish as much detail on finances and executive pay. But Forbes estimates Edens, who remains a co-chief executive, is worth $1.2bn.

Contributor

Sarah Butler

The GuardianTramp

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