Friday 25 June 7.30am – sequestered in the bowels of (redacted) bank: GBH has been hired by a bunch of ravening wolves looking to tear apart Morrisons. No, not Clayton Dubilier and whatever – another lot, who make The Dubliners, as we call them, look like lambs.
GBH is on a kiss and a promise of scraps for an estimate of how much the 479 freehold stores are worth in a sale-and-leaseback deal. I’m in the room because I was a junior valuer at DTZ in 2007 and worked on the team hired by CVC and Blackstone to run the rule over Sainsbury’s. Their stores were worth billions more than book value, or were, until the market collapsed – along with the takeover.
Back in the room. Man in $5,000 suit says: “Bottom line, how much will we get if we force the operating company to pay market rents?” Big moment.
I begin my 10-minute presentation: “Morrisons sliced £1.8bn off its freeholds in January, shrinking the book value from £4.2bn to £2.4bn. Land them with 30-year leases and upward-only rent reviews every five years and GBH reckons the freeholds could be flogged for £5bn, plus another £1bn for resi development potential, that of course depends on…”
Man in suit interrupts: “Sonny, that’s enough, you can go now.” Sonny!
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