Morrison brothers plot AWG raids

By ROBERT LEA
Updated:

 

BROTHERS Sir Fraser and Gordon Morrison are hatching plots for separate raids on Anglian Water group AWG which could ultimately bring the reincarnation of their family firm Morrison Construction - the business they contentiously sold to AWG in 2000 for £263m.

It can be revealed that days before AWG last week slapped a £130m writ on Sir Fraser over the sale of Morrison Construction, Sir Fraser tabled a bid of at least £120m for AWG's property and housing portfolio.

Sir Fraser's offer is understood to have been rejected by AWG's board. But since then AWG has come under siege from investment bank WestLB, which plans a £900m management buy-in of the whole group, part-led by Gordon Morrison.

It is understood that under WestLB's plans, Gordon Morrison would be put in charge of AWG's utilities asset management and construction division, with separate executives brought in to run Anglian Water and AWG's international interests.

WestLB's financing chief Robin Saunders wants the stable returns of the regulated Anglian Water business and it is likely that in time Gordon Morrison could be encouraged to launch a buyout of the construction arm, much of which was part of the old Morrison group.

Sir Fraser denies any involvement with the WestLB bid but has confirmed that he will look at any part of the old Morrison group within AWG that may come up for grabs. 'Nothing is ruled in, nothing is ruled out,' he said. He also confirmed that he has already bid for AWG's property and housebuilding business, a legacy of the Morrison acquisition. He has put together a management team to take over the business but a fully-funded offer worth at least £120m has so far been rebuffed by AWG.

A WestLB takeover of AWG would be a bonus for Sir Fraser - for several reasons. Not only would a change of ownership increase his chances of buying the property and house-building business, it is likely that the lawsuit against him would be dropped.

Sir Fraser has been accused by AWG's board led by chief executive Chris Mellor of 'inducing' AWG to overpay for Morrison two and half years ago. AWG contends Morrison made a profit forecast of £30m for 2000/2001 when in fact it made a loss of £46m.

Sir Fraser has rejected the claims. 'Chris Mellor clearly paid a very high price for Morrison even when institutional shareholders were saying that he was paying a ridiculous amount,' he said. 'Clearly this is huge embarrassment to him and this [legal action] is all part of Chris Mellor trying to justify the acquisition.'

WestLB's offer has also increased the value of Sir Fraser's stake in AWG. He took half the £57m he received from the sale of Morrison in AWG shares. That £23.5m stake had nearly halved in value by last year.

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