Morrisons is set to be taken over as part of a £600 million deal, just weeks after the supermarket chain confirmed the closure of 100 stores. Realty Income Corporation, a US real estate investment trust, is among a small number of parties in discussions with advisers to Morrisons about a potential transaction.
Details of the Deal
While the specifics of the deal are not yet publicly known, it is believed that Realty Income Corporation could invest £600 million as part of Morrisons' ongoing search for fresh investors. According to Sky News, a deal is not imminent but signals that Morrisons is pursuing plans to engage with a real estate advisory firm, a strategy flagged around six months ago.
Background and Financial Context
The supermarket chain had previously confirmed it would seek a deal as it steadily pays down debts following a takeover by CD&R. In 2024, Morrisons struck a partnership with investment firm Song Capital, which paid £370 million for the right to receive an income stream from 75 of the chain's supermarkets for 45 years.
Store Closures and Impact
Morrisons earlier confirmed the closure of the first of 100 supermarkets, which opened less than two years ago. The Morrisons Daily store in Woodley, Reading, shut down on Sunday, resulting in the loss of a local Post Office. A spokesperson for the supermarket giant said: "The performance of all company-owned stores across our Convenience business is subject to continuous review. Having completed the review, we are now proposing to take the tough but necessary decision to close a number of these stores over the next few months. This process has identified a number of stores, which were part of the McColl's acquisition, whose performance has been challenged for a number of years and which are loss-making, despite remedial action."
Reasons for Closures
The company cited "significant cost increases" due to "government policy choices" as part of the reason for the closures. The deal with Realty Income Corporation could provide much-needed capital to stabilize the business and support its turnaround strategy.
