Private equity predators on pandemic plundering spree preying on British firms


Labour today vows to stop private equity vultures from swooping on British firms.

Shadow Chancellor Rachel Reeves is pledging to bring in tougher rules to prevent big finance from buying and then gutting companies.

The move follows mounting anger at the pandemic plundering spree, with more than 120 businesses snapped up.

Ms Reeves accused No10 of standing by as speculators circle supermarket giant Morrisons, raising fears posts and livelihoods could be put at risk.

She also cited the non-private equity takeover of the McVitie’s factory in Glasgow, where 500 jobs are set to go because its Turkish owners want to shift production overseas, and the GKN plant in Birmingham that could be closed by investment firm Melrose.

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Ms Reeves said: “Everybody knows there is a problem with private equity companies from the tax advantages to the lax rules on takeovers, which are much stronger in other countries.

“We don’t do enough to support businesses that provide good quality jobs.

“It’s wrong private equity companies can saddle companies with huge debt, asset strip them and then walk away.”



£7bn: Value of Asda takeover by Blackburn-based billionaire Issa brothers and private equity partners TDR Capital
£7bn: Value of Asda takeover by Blackburn-based billionaire Issa brothers and private equity partners TDR Capital

The takeover practices criticised by Ms Reeves are not illegal, and she has set out five tests for No10 as the economy recovers from the Covid slump.

They are: to make sure British industries thrive; greater job security and choice; higher pay and lower costs of living; ensuring no one and nowhere is left behind; and creating a ­sustainable recovery.

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At the heart of Labour ’s plans is a commitment to make, buy and sell more goods in this country. It would change procurement rules so more Government contracts go to UK firms.



£218m: Cost of deal when roadside rescuer the AA was snapped up by TowerBrook Capital and Warburg Pincus
£218m: Cost of deal when roadside rescuer the AA was snapped up by TowerBrook Capital and Warburg Pincus

There would also be more help for businesses looking to re-shore manufacturing.

Ms Reeves said she is keen to change people’s perceptions of Labour and show it is pro-business.

But she insisted support for firms must go hand in hand with workers’ rights including tackling fire and rehire.

While Ms Reeves insisted Labour’s vow to raise the minimum wage to at least £10 an hour remained, she would not be drawn on future spendings.



£940m: Amount paid to Tate & Lyle by KPS Capital Partners for a controlling stake in its sweetener division
£940m: Amount paid to Tate & Lyle by KPS Capital Partners for a controlling stake in its sweetener division

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But she blasted the Tories’ “waste” of public funds such as the £37billion on Test and Trace and the £200million royal yacht plan.

She said: “I have always done everything I can to ensure value for money, you don’t get that with this Chancellor.”

Trail of destruction as sharks bite over the pandemic

  • Insurance giant LV= is at risk of being swallowed up by private equity giant Bain for £530m. LV= chiefs recommended the offer but shareholders have yet to vote.
  • Asda was sold in February to the Blackburn-based billionaire Issa brothers and their private equity partners TDR Capital for £6.8bn.
  • Melrose bought GKN in 2018 in an £8bn hostile takeover. The firm was then hit by a shareholder revolt after four executives each got £42m in bonuses.
  • The AA has fallen into private equity ownership for a second time and is being sold to TowerBrook Capital
    and Warburg Pincus for £218m.
  • Security firm G4S was sold for £3.8bn in March to Allied Universal, which is owned by a consortium including the private equity firm Warburg Pincus.
  • US private equity giant Blackstone Group purchased Bourne Leisure – the owner of Butlin’s, Haven Holidays and Warner Leisure hotels – in February.
  • Tate & Lyle is to be split into two after KPS Capital Partners paid £940m for a controlling stake in its sweetener unit.
  • In 2019, shareholders approved a £4bn takeover of British defence giant Cobham by US private equity outfit Advent International. It came despite fierce opposition from politicians.
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