Wm Morrison Supermarkets PLC  – end of an era and time for long-term shareholders to consider their Capital Gains Tax exposure.

October 2021 marked the end of an era – Wm Morrison Supermarkets PLC was acquired by Clayton, Dubilier & Rice at an agreed cash price of £2.85 per share. The supermarket chain was listed on the UK stock market for over 50 years and can trace its roots back to 1899 when William Morrison set up his “egg and butter” stall in Bradford market.

My connection with the company does not go back quite as far but I did have a short spell working for them in the late 1970’s – it was a “Saturday job” working in the warehouse at their Bolton Junction supermarket in Bradford. It was tough work because the warehouse was underneath the shopfloor, which necessitated the continuous movement of pallets into a relatively small lift and then out onto the shelves.

Anyway, I digress but I’m pleased to have that connection with the company and eventually bought some shares because I wanted a stake in a business that myself and my family used every week (and still do).  Holding the shares was never going to make me rich and for many years the share price just “plateaued” but I hung on to the shares, more out of loyalty to a business I believed in rather than for any longer-term investment opportunity.

So, I guess I was more surprised than many when earlier this year the company attracted interest from a variety of US suitors who felt they could run the business in a more profitable way than the current management team – not surprisingly the share price rose as a result of all this interest and in the summer of 2021 the share price moved from a sleepy £1.75 per share to over £2.80. In the end, due to the interest from more than one party, final bids were required to determine who would be the successful bidder of a prized UK food retailer. Clayton, Dubilier & Rice were successful with their £2.85 per share cash offer.

This successful bid is likely to have Capital Gain Tax (CGT) implications for many private investors in the Yorkshire region (including many former employees and their families) and as a Chartered Tax Advisor I am familiar with both the calculation issues but also the Self-Assessment Tax Return requirements to disclose any capital gains as a result of this take-over in excess of £12,300 for the 2021/22 tax year. Also, you may still have time in this tax year to mitigate any potential exposure to CGT as a result of this take-over.

So if you need help with your CGT planning please get in touch – I can be contacted at: nigel.shaw@langricks.com 

OR on: 07540 113289