Morrisons may seek to lure investors into Grimsby Europarc with the sale and leaseback of a seafood site
Morrisons new owners may seek to sell and lease the manufacturing facilities it owns in Grimsby as it seeks to finance the huge deal and fund its future projects.
Private equity firm Clayton Dubilier & Rice secured a £7billion deal for the Bradford-based supermarket giant in October last year after a lengthy auction process.
The deal for the then FTSE-listed company was cleared by the UK Competition and Markets Authority earlier this month, with CD&R being advised by former Tesco chief executive Sir Terry Leahy.
Read more: Wykeland plans to continue Europarc expansion in Grimsby with inbound investor deal reached
A factory sale has been heavily speculated, with the vertically integrated model of large-scale food production and retail a unique selling point for Morrisons, and although the company declines to comment, operations look set to stay in-house .
Sources suggest that long-term agreements could be put in place for the sale-leaseback of sold sites – with a high percentage currently in full ownership.
Such transactions would create a significant cash injection for the big four operators and could prove attractive to property investors with a strong tenant in place to secure long-term income.
Morrisons took over the former Kwoks Foods site from Europarc almost a decade ago, adding the larger former Kerry Foods factory on the same business park a few years later.
It was mothballed in 2012, having been built as a ready meals factory for Headland Foods in 2002.
While cost challenges abound, the retail-focused seafood sector in Grimsby has seen strong growth throughout the pandemic, which is reflected in plant expansion.
Hilton Seafood is completing a major site addition on the South Humberside industrial estate, while New England Seafood International has acquired the neighboring Haith facility on Europarc as part of a future plan, occupying it renting again as he works towards a new eco-centre in Louth.
CD&R’s approach to Morrisons sparked a three-month bidding war with Fortress, but the company was delisted ahead of a deal to sell a number of petrol stations, satisfying the watchdog of competition.
Follow BusinessLive Humber on LinkedIn and Twitter? Click to join the conversation.