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Price and Politics Set Stage for Three-Way Morrison Bidding War – Financial Post

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(Bloomberg) — A trio of the world’s largest private equity investors are vying for a once-unloved grocer from Bradford in the north of England — setting the scene for a second three-way takeover fight in the U.K.’s supermarket sector in less than a year.

Ultimately, the battle for Wm Morrison Supermarkets Plc could be won on three fronts: price, property and politics.

Here’s how the contenders stack up:

Fortress Investment Group

So far, Fortress Investment Group is in pole position. A consortium led by the SoftBank Group Corp. subsidiary has won over bosses of the country’s fourth-largest supermarket with a 6.3 billion-pound ($8.7 billion) bid and pledges over pay, pensions and suppliers.

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It also moved quickly to assure the U.K. government of its credentials as a “responsible owner,” highlighting the potential role politicians could play in sanctioning a deal amid concerns over worker protections and food supply.

“We are acutely aware of the wider responsibilities that come with ownership of a business with Morrisons’ history, culture and importance to the British public,” Fortress Managing Partner Joshua Pack wrote to U.K. Business Secretary Kwasi Kwarteng in a letter seen by Bloomberg News.

In its letter, Fortress made certain assurances not to sell the Morrison family silver: almost 500 stores, as well as manufacturing sites, some 85% of which it owns freehold. This could be key in winning over investors and politicians.

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Legal & General Investment Management, a top 10 Morrison shareholder, asked Monday for more information on the value of the real estate so investors can decide whether bidders are angling to buy the company on the cheap. The property portfolio was last valued at about 6 billion pounds.

Others in the Fortress consortium include the Canada Pension Plan Investment Board and the real-estate arm of Koch Industries Inc., the largest closely held company in the U.S., run by the Koch family of prominent conservative political donors.

Clayton Dubilier & Rice

The Fortress proposal came in above an earlier 5.5 billion-pound offer from U.S. private equity house Clayton Dubilier & Rice, rejected by Morrison as being too low. CD&R was in the midst of talks with financing banks as it mulled a higher bid when it was caught off guard by the Fortress announcement, according to people familiar with the matter.

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It continues to consider its next steps and there’s a sense at the private equity investor that even though Fortress currently has the backing of the Morrison board, a higher bid could ultimately win the day, the people said, asking not to be identified discussing confidential information.

It’s already received an indication from another top Morrison investor, J O Hambro Capital Management Ltd., that a new proposal in the 270 pence-per-share range would be worth serious consideration; Fortress has offered 252 pence in cash and a 2 pence special dividend per share.

CD&R is no stranger to U.K. retail and works closely with senior adviser Terry Leahy, the former chief executive officer of Tesco Plc. Most of Morrison’s top management team is made up of former Tesco employees who worked with Leahy when he was aggressively expanding into Asia and the U.S. Analysts have said it’s unlikely that CD&R, armed with this intimate sector knowledge, will not return to the fold.

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A representative for CD&R declined to comment.

Apollo Global Management

Fortress could face further competition from Apollo Global Management Inc., which informed the market Monday that it had also been looking at Morrison. The firm said it has made no approach and it’s in preliminary stages of considering one.

The New York-based alternatives investor has already done some recent homework on the sector, having been one of the bidders for Asda Group Ltd., Britain’s third-largest grocer, in 2020. Asda, which also drew interest from Lone Star Funds, was eventually taken over by TDR Capital and the Issa brothers in a 6.5 billion-pound deal.

A potential setback for Apollo this time around could be the absence of Fabrice Nottin. He was a partner who helped lead Apollo’s discussions around a possible Asda deal, only to leave soon after, according to people familiar with the matter.

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A representative for Apollo didn’t immediately provide comment.

Silent Suitors

U.K. supermarkets are well and truly in the crosshairs of private equity, with firms drawn to the sector by cheap public valuations, sizable real estate portfolios and reliable and significant cash flows. More recently, grocers have seen a surge in store and online sales as the pandemic changes consumer spending habits — possibly for good.

As a result, the market isn’t ruling out more firms coming forward with bids for Morrison.

“With Fortress offering 254p a share and no sale and leasebacks, others might be stacking up the numbers to come back with a higher price that will include property disposals,” said Tony Shiret, a retail analyst at Panmure Gordon & Co., said in a phone interview.

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“Private equity offers are strange beasts as they often don’t have to start paying commitment fees on financing until there’s a firm offer, so there is plenty of time for a lot of messing about before everything gets finalized,” he said.

Questions also remain about the intentions of Amazon.com Inc., which stunned the global grocery sector in 2017 when it bought Whole Foods Market Inc. Amazon and Morrison already have a close relationship: Morrison supplies the U.S. giant’s cashier-less grocery shops in the U.K. and sells food to its Prime members. Controlling the supermarket would give Amazon a national store network and food production capabilities, enabling it to finally crack the grocery business in Britain.

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This year, Amazon opened its first “just walk out” store in west London, where shoppers can pick up goods and leave without having to use a checkout point. Many of the items in the store are supplied by Morrison, which unlike rivals has a large wholesale manufacturing arm and makes much of the food it sells.

Reaction So Far

In the past, private equity has garnered a bad reputation in the U.K. for raking in cash by selling off valuable assets while leaving companies lumbered with ever-increasing rent bills. But the political reaction to a potential buyout of one of Britain’s four key grocers has been muted so far.

Kwarteng is engaged with and monitoring the situation, according to his office, while Prime Minister Boris Johnson has stayed clear by stating any change of control at Morrison is a “commercial matter.”

The opposition Labour Party has demanded close scrutiny of the potential foreign private equity acquisition of a 122-year-old chain highly concentrated around northern England. Morrison’s main union, Unite, has demanded guarantees on jobs and working conditions in any takeover. Morrison has some 113,000 employees.

©2021 Bloomberg L.P.

Bloomberg.com

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Beyoncé channels Pamela Anderson in ‘Baywatch’ for Halloween video asking viewers to vote

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NEW YORK (AP) — In a new video posted early Election Day, Beyoncé channels Pamela Anderson in the television program “Baywatch” – red one-piece swimsuit and all – and asks viewers to vote.

In the two-and-a-half-minute clip, set to most of “Bodyguard,” a four-minute cut from her 2024 country album “Cowboy Carter,” Beyoncé cosplays as Anderson’s character before concluding with a simple message, written in white text: “Happy Beylloween,” followed by “Vote.”

At a rally for Donald Trump in Pittsburgh on Monday night, the former president spoke dismissively about Beyoncé’s appearance at a Kamala Harris rally in Houston in October, drawing boos for the megastar from his supporters.

“Beyoncé would come in. Everyone’s expecting a couple of songs. There were no songs. There was no happiness,” Trump said.

She did not perform — unlike in 2016, when she performed at a presidential campaign rally for Hillary Clinton in Cleveland – but she endorsed Harris and gave a moving speech, initially joined onstage by her Destiny’s Child bandmate Kelly Rowland.

“I’m not here as a celebrity, I’m not here as a politician. I’m here as a mother,” Beyoncé said.

“A mother who cares deeply about the world my children and all of our children live in, a world where we have the freedom to control our bodies, a world where we’re not divided,” she said at the rally in Houston, her hometown.

“Imagine our daughters growing up seeing what’s possible with no ceilings, no limitations,” she continued. “We must vote, and we need you.”

The Harris campaign has taken on Beyonce’s track “Freedom,” a cut from her landmark 2016 album “Lemonade,” as its anthem.

Harris used the song in July during her first official public appearance as a presidential candidate at her campaign headquarters in Delaware. That same month, Beyoncé’s mother, Tina Knowles, publicly endorsed Harris for president.

Beyoncé gave permission to Harris to use the song, a campaign official who was granted anonymity to discuss private campaign operations confirmed to The Associated Press.

The Canadian Press. All rights reserved.

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Justin Trudeau’s Announcing Cuts to Immigration Could Facilitate a Trump Win

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Outside of sports and a “Cold front coming down from Canada,” American news media only report on Canadian events that they believe are, or will be, influential to the US. Therefore, when Justin Trudeau’s announcement, having finally read the room, that Canada will be reducing the number of permanent residents admitted by more than 20 percent and temporary residents like skilled workers and college students will be cut by more than half made news south of the border, I knew the American media felt Trudeau’s about-face on immigration was newsworthy because many Americans would relate to Trudeau realizing Canada was accepting more immigrants than it could manage and are hoping their next POTUS will follow Trudeau’s playbook.

Canada, with lots of space and lacking convenient geographical ways for illegal immigrants to enter the country, though still many do, has a global reputation for being incredibly accepting of immigrants. On the surface, Montreal, Toronto, and Vancouver appear to be multicultural havens. However, as the saying goes, “Too much of a good thing is never good,” resulting in a sharp rise in anti-immigrant sentiment, which you can almost taste in the air. A growing number of Canadians, regardless of their political affiliation, are blaming recent immigrants for causing the housing affordability crises, inflation, rise in crime and unemployment/stagnant wages.

Throughout history, populations have engulfed themselves in a tribal frenzy, a psychological state where people identify strongly with their own group, often leading to a ‘us versus them’ mentality. This has led to quick shifts from complacency to panic and finger-pointing at groups outside their tribe, a phenomenon that is not unique to any particular culture or time period.

My take on why the American news media found Trudeau’s blatantly obvious attempt to save his political career, balancing appeasement between the pitchfork crowd, who want a halt to immigration until Canada gets its house in order, and immigrant voters, who traditionally vote Liberal, newsworthy; the American news media, as do I, believe immigration fatigue is why Kamala Harris is going to lose on November 5th.

Because they frequently get the outcome wrong, I don’t take polls seriously. According to polls in 2014, Tim Hudak’s Progressive Conservatives and Kathleen Wynne’s Liberals were in a dead heat in Ontario, yet Wynne won with more than twice as many seats. In the 2018 Quebec election, most polls had the Coalition Avenir Québec with a 1-to-5-point lead over the governing Liberals. The result: The Coalition Avenir Québec enjoyed a landslide victory, winning 74 of 125 seats. Then there’s how the 2016 US election polls showing Donald Trump didn’t have a chance of winning against Hillary Clinton were ridiculously way off, highlighting the importance of the election day poll and, applicable in this election as it was in 2016, not to discount ‘shy Trump supporters;’ voters who support Trump but are hesitant to express their views publicly due to social or political pressure.

My distrust in polls aside, polls indicate Harris is leading by a few points. One would think that Trump’s many over-the-top shenanigans, which would be entertaining were he not the POTUS or again seeking the Oval Office, would have him far down in the polls. Trump is toe-to-toe with Harris in the polls because his approach to the economy—middle-class Americans are nostalgic for the relatively strong economic performance during Trump’s first three years in office—and immigration, which Americans are hyper-focused on right now, appeals to many Americans. In his quest to win votes, Trump is doing what anyone seeking political office needs to do: telling the people what they want to hear, strategically using populism—populism that serves your best interests is good populism—to evoke emotional responses. Harris isn’t doing herself any favours, nor moving voters, by going the “But, but… the orange man is bad!” route, while Trump cultivates support from “weird” marginal voting groups.

To Harris’s credit, things could have fallen apart when Biden abruptly stepped aside. Instead, Harris quickly clinched the nomination and had a strong first few weeks, erasing the deficit Biden had given her. The Democratic convention was a success, as was her acceptance speech. Her performance at the September 10th debate with Donald Trump was first-rate.

Harris’ Achilles heel is she’s now making promises she could have made and implemented while VP, making immigration and the economy Harris’ liabilities, especially since she’s been sitting next to Biden, watching the US turn into the circus it has become. These liabilities, basically her only liabilities, negate her stance on abortion, democracy, healthcare, a long-winning issue for Democrats, and Trump’s character. All Harris has offered voters is “feel-good vibes” over substance. In contrast, Trump offers the tangible political tornado (read: steamroll the problems Americans are facing) many Americans seek. With Trump, there’s no doubt that change, admittedly in a messy fashion, will happen. If enough Americans believe the changes he’ll implement will benefit them and their country…

The case against Harris on immigration, at a time when there’s a huge global backlash to immigration, even as the American news media are pointing out, in famously immigrant-friendly Canada, is relatively straightforward: During the first three years of the Biden-Harris administration, illegal Southern border crossings increased significantly.

The words illegal immigration, to put it mildly, irks most Americans. On the legal immigration front, according to Forbes, most billion-dollar startups were founded by immigrants. Google, Microsoft, and Oracle, to name three, have immigrants as CEOs. Immigrants, with tech skills and an entrepreneurial thirst, have kept America leading the world. I like to think that Americans and Canadians understand the best immigration policy is to strategically let enough of these immigrants in who’ll increase GDP and tax base and not rely on social programs. In other words, Americans and Canadians, and arguably citizens of European countries, expect their governments to be more strategic about immigration.

The days of the words on a bronze plaque mounted inside the Statue of Liberty pedestal’s lower level, “Give me your tired, your poor, your huddled masses yearning to breathe free…” are no longer tolerated. Americans only want immigrants who’ll benefit America.

Does Trump demagogue the immigration issue with xenophobic and racist tropes, many of which are outright lies, such as claiming Haitian immigrants in Ohio are abducting and eating pets? Absolutely. However, such unhinged talk signals to Americans who are worried about the steady influx of illegal immigrants into their country that Trump can handle immigration so that it’s beneficial to the country as opposed to being an issue of economic stress.

In many ways, if polls are to be believed, Harris is paying the price for Biden and her lax policies early in their term. Yes, stimulus spending quickly rebuilt the job market, but at the cost of higher inflation. Loosen border policies at a time when anti-immigrant sentiment was increasing was a gross miscalculation, much like Trudeau’s immigration quota increase, and Biden indulging himself in running for re-election should never have happened.

If Trump wins, Democrats will proclaim that everyone is sexist, racist and misogynous, not to mention a likely White Supremacist, and for good measure, they’ll beat the “voter suppression” button. If Harris wins, Trump supporters will repeat voter fraud—since July, Elon Musk has tweeted on Twitter at least 22 times about voters being “imported” from abroad—being widespread.

Regardless of who wins tomorrow, Americans need to cool down; and give the divisive rhetoric a long overdue break. The right to an opinion belongs to everyone. Someone whose opinion differs from yours is not by default sexist, racist, a fascist or anything else; they simply disagree with you. Americans adopting the respectful mindset to agree to disagree would be the best thing they could do for the United States of America.

______________________________________________________________

 

Nick Kossovan, a self-described connoisseur of human psychology, writes about what’s

on his mind from Toronto. You can follow Nick on Twitter and Instagram @NKossovan.

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RFK Jr. says Trump would push to remove fluoride from drinking water. ‘It’s possible,’ Trump says

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PHOENIX (AP) — Robert F. Kennedy Jr., a prominent proponent of debunked public health claims whom Donald Trump has promised to put in charge of health initiatives, said Saturday that Trump would push to remove fluoride from drinking water on his first day in office if elected president.

Fluoride strengthens teeth and reduces cavities by replacing minerals lost during normal wear and tear, according to the U.S. Centers for Disease Control and Prevention. The addition of low levels of fluoride to drinking water has long been considered one of the greatest public health achievements of the last century.

Kennedy made the declaration Saturday on the social media platform X alongside a variety of claims about the heath effects of fluoride.

“On January 20, the Trump White House will advise all U.S​. water systems to remove fluoride from public water,” Kennedy wrote. Trump and his wife, Melania Trump, “want to Make America Healthy Again,” he added, repeating a phrase Trump often uses and links to Kennedy.

Trump told NBC News on Sunday that he had not spoken to Kennedy about fluoride yet, “but it sounds OK to me. You know it’s possible.”

The former president declined to say whether he would seek a Cabinet role for Kennedy, a job that would require Senate confirmation, but added, “He’s going to have a big role in the administration.”

Asked whether banning certain vaccines would be on the table, Trump said he would talk to Kennedy and others about that. Trump described Kennedy as “a very talented guy and has strong views.”

The sudden and unexpected weekend social media post evoked the chaotic policymaking that defined Trump’s White House tenure, when he would issue policy declarations on Twitter at virtually all hours. It also underscored the concerns many experts have about Kennedy, who has long promoted debunked theories about vaccine safety, having influence over U.S. public health.

In 1950, federal officials endorsed water fluoridation to prevent tooth decay, and continued to promote it even after fluoride toothpaste brands hit the market several years later. Though fluoride can come from a number of sources, drinking water is the main source for Americans, researchers say.

Officials lowered their recommendation for drinking water fluoride levels in 2015 to address a tooth condition called fluorosis, that can cause splotches on teeth and was becoming more common in U.S. kids.

In August, a federal agency determined “with moderate confidence” that there is a link between higher levels of fluoride exposure and lower IQ in kids. The National Toxicology Program based its conclusion on studies involving fluoride levels at about twice the recommended limit for drinking water.

A federal judge later cited that study in ordering the U.S. Environmental Protection Agency to further regulate fluoride in drinking water. U.S. District Judge Edward Chen cautioned that it’s not certain that the amount of fluoride typically added to water is causing lower IQ in kids, but he concluded that mounting research points to an unreasonable risk that it could be. He ordered the EPA to take steps to lower that risk, but didn’t say what those measures should be.

In his X post Saturday, Kennedy tagged Michael Connett, the lead attorney representing the plaintiff in that lawsuit, the environmental advocacy group Food & Water Watch.

Kennedy’s anti-vaccine organization has a lawsuit pending against news organizations including The Associated Press, accusing them of violating antitrust laws by taking action to identify misinformation, including about COVID-19 and COVID-19 vaccines. Kennedy is on leave from the group but is listed as one of its attorneys in the lawsuit.

What role Kennedy might hold if Trump wins on Tuesday remains unclear. Kennedy recently told NewsNation that Trump asked him to “reorganize” agencies including the U.S. Centers for Disease Control and Prevention, the National Institutes of Health, the Food and Drug Administration and some agencies under the Department of Agriculture.

But for now, the former independent presidential candidate has become one of Trump’s top surrogates. Trump frequently mentions having the support of Kennedy, a scion of a Democratic dynasty and the son of former Attorney General Robert Kennedy and nephew of President John F. Kennedy.

Kennedy traveled with Trump Friday and spoke at his rallies in Michigan and Wisconsin.

Trump said Saturday that he told Kennedy: “You can work on food, you can work on anything you want” except oil policy.

“He wants health, he wants women’s health, he wants men’s health, he wants kids, he wants everything,” Trump added.

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