Morrisons shareholders warn over "incredibly dangerous" plan to sell stores

One top 20 shareholder and institutional investor said: “It is incredibly dangerous. I wouldn’t sell the crown jewels to keep the boat afloat.

“They need to focus on the core estate and get trading as good as it can be.”

The investor said that although a sale of the stores would raise cash, it could lead to Morrisons debt rising as the companys rental liabilities increased.

Another top 20 shareholder said Morrisons needed to focus on developing a multichannel strategy. The investor said: “Aldi will continue with its forward march which will cause problems. In order to do well they need a multi-channel approach and they don’t have one.”

The reason Morrisons owns a large proportion of its stores is due to former boss Sir Ken Morrison, who wanted to keep control of the company's destiny rather than be left at the mercy of long-lease agreements.

The supermarket retailer is conducting a review of its balance sheet and intends to confirm its plans in March. Morrisons, which is led by Dalton Philips, has said it intends to remain “overwhelmingly freehold”. However, by selling off just 10pc of its stores the company could raise approximately £800m.

Any sale of Morrisons supermarkets would be through a sale-and-leaseback deal, whereby the retailer sells the property to an investor and then leases it back from them. A number of institutional investors and pension funds are understood to be interested in buying Morrisons’ stores.

Morrisons declined to comment.

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