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Speculations are
unsettling, says Usdaw's John Hannett: No extra benefits for personnel if Sainsbury's is bought by private equity - We can see no evidence that a takeover funded by private equity will produce extra benefits for our members in a company that is already performing well thanks to a positive working relationship between Usdaw and the Sainsbury's management team, says John Hannett, general secretary of the British shop workers' union. The UK retailer which once was the market leader lost its number one position to Tesco in the mid 1990s. The last few years, it has fought with Wal-Mart subsidiary ASDA about the second place. Business has indeed picked up for Sainsbury's during the last two or three years, with a subsequent rise in share prices. - Our Sainsbury's members have played a central role in the massive turnabout in the company's fortunes and this sort of speculation about takeovers is very unsettling for them, says John Hannett, who is also vice president of UNI-Europa Commerce. Sainsbury's has confirmed that a private equity consortium consisting of Kohlberg Kravis Roberts, also known as KKR, the Blackstone Group and CVC Capital Partners has indeed studied the company for a possible take-over offer. No offer has, however, been given to the shareholders. Together with a fourth private equity company - the Texas Pacific Group - these funds were involved in a take-over attempt of leading Australian retailer Coles. Their offers were, however, rejected by the shareholders and management. Also here, the company which they targeted was performing soundly and enjoyed a constructive social relationship with the personnel and their union, UNI Commerce affiliate SDA. In a letter to British newspaper The Guardian, UNI general secretary Philip Jennings says that private equity takeovers often mean that companies become heavily indebted and that working conditions are driven down to pay the costs. He called on governments to find ways "to bring these runaway funds back under public scrutiny and safeguard before too many people, including workers and pensioners, get hurt." In South Africa, a private equity takeover of leading retailer Shoprite has been in the makings since October. This would be the country's biggest private equity deal ever. Shoprite is a regional multinational, Africa's largest retailer, with stores also in neighbouring countries and with plans to establish itself also in India.
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