Michael Gleeson has stepped down as chief financial officer at Wm Morrison months after the supermarket chain was taken over by private equity and ahead of a major refinancing.
In a statement on Friday, Gleeson said it was “a good time for me to take on a fresh challenge”. Morrisons chief executive, David Potts, said he had “made a significant contribution to the business over the past eight years”.
Gleeson joined Morrisons in 2014 as group financial controller and held several other positions before becoming chief financial officer in 2020. The previous CFO, Trevor Strain, became chief operating officer in a management reshuffle widely interpreted as laying the ground for Potts’ eventual departure.
Potts subsequently decided to stay on, and the calibre of the executive team at Morrisons was cited by US private equity group Clayton, Dubilier and Rice as a significant reason for its pursuit of the company.
All three, along with Morrisons former chair, Andrew Higginson, previously worked at Tesco under Sir Terry Leahy, who is a senior adviser to CD&R and now chairs Morrisons.
CD&R beat off stiff competition from a consortium led by Fortress Investment to seal the deal, which triggered a windfall for top executives.
Gleeson received around £2.5mn from shares he owned directly and from the partial vesting of a performance-related incentive plan. He also received payouts from future incentive plans that vested upon a change of control, though the terms of these awards have not been disclosed.
The £10bn cost of the Morrisons acquisition was financed by £3.4bn of equity and a £6.6bn package of bridging loans that will need to be refinanced.
Morrisons and CD&R considered launching a debt refinancing immediately after the takeover completed, but the emergence of the Omicron variant of Covid-19 meant the process was delayed until after Christmas.
Since then, Russia’s invasion of Ukraine has brought large-scale new issuance to a virtual halt and sent prices of existing debt down. Bonds issued last year by rival Asda following its own takeover are now trading at around a 10 per cent discount to their face value.
Morrisons is regarded by credit analysts as a higher-risk borrower than Asda because it will be operating with more debt relative to its profits.
One person with knowledge of the refinancing process said that while most new issuance was on hold at the moment, the company aimed to be ready to start roadshows as soon as market conditions improved.
Although a formal date for Gleeson’s departure has not yet been set, it is unlikely he will now take part in these events once the marketing process starts.
The person added that the delay was unlikely to result in more of Morrison’s assets being sold off. During the bidding process, CD&R pledged not to engage in “material” sale and leaseback transactions on the group’s predominantly freehold store estate.
