MPs blast bid frontrunner that could run Morrisons from Cayman Islands

MPs have criticised the current frontrunner to purchase Morrisons, who have said they will administer the business from the Cayman Islands.

American private equity firm Clayton, Dubilier and Rice (CD&R) has said it will use an entity called Market21 GP Holdings in the Caribbean tax haven as it released its proposals for the UK-based supermarket chain to investors.

The firm’s £7 billion bid makes it the current frontrunner in the four-month battle to purchase the company, set to end next month.

Parliamentarians said it ‘beggars belief’ that another major grocer could be managed through an overseas tax haven, and called on the Government to tighten rules on foreign takeovers. Last year Asda’s ownership was transferred to the Channel Island after it was purchased by the Issa brothers and TDR Capital.

Conservative MP Kevin Hollinrake has said he will write to ex-Tesco boss Sir Terry Leahy, who is heading up the bid, to ask whether the firm will pay UK taxes.

Darren Jones, chairman of the House of Commons business committee, added: “The idea that private equity can just sweep in, buy up British businesses and move them offshore to reduce the amount of tax they pay, without any rules or regulatory interventions, is just madness and an insult to British taxpayers.”

Labour MP and anti-tax avoidance campaigner Margaret Hodge, said: “It beggars belief that one of our biggest supermarkets could soon be bought by a private equity firm using tax havens.”

CD&R has said the entity that will own Morrisons, Market Bidco, will be registered and incorporated in the UK, adding: “Morrisons will remain registered in the UK, headquartered in Bradford and continue to pay taxes in the UK.”’