The only person who really knows is Sir Ken

“The only person who really knows is Sir Ken.”Although hopes are high that the chain could unveil its new chief executive at the AGM, the insider said that while the decision was “very close”, the appointment was unlikely to be made by Thursday. These are Mark Bolland, the chief operating officer of the Dutch brewer Heineken; David Wild, a former Tesco executive and now head of Wal-Mart’s German stores; and Ian Meakins, the outgoing boss of Alliance UniChem, the pharmacy chain that is merging with Boots.An insider confirmed that Sir Ken would discuss his departure at the AGM, but also stressed he was unlikely to make his final decision on timing until the board meeting beforehand. The shares toppled and the chain’s poor corporate governance standards, up until then largely tolerated in the City, also came under fire. Non-executive directors were appointed and the managing director Bob Stott was made temporary chief executive.But the City is still adamant that a new chief executive needs to be brought on board to take over from both Mr Stott and Sir Ken, and concerns have been raised that the ongoing presence of Sir Ken could deter potential candidates.It is understood that three candidates are in the frame. He oversaw one of the big retail success stories of the time, consistently delivering growth, but in the past two years the chain – and Sir Ken in particular – has come under fire from the City.Soon after it completed its £3bn acquisition of its larger rival Safeway in March 2004, the chain started to flounder and put out a raft of profit warnings as it struggled to integrate the business. Wm Morrison’s AGM is on Thursday.
Although he stepped back to become executive chairman last year, the City is still keen to hear about Sir Ken’s long-term plans as the search for a new chief executive continues.Sir Ken joined the Bradford-based retailer in 1952 after finishing his national service.

Sir Ken, 74, told investors at the company’s annual general meeting last year that he would spend the next 12 months deciding how to arrange his succession before reporting back to them at the 2006 meeting. Much of the corporate mergers and acquisitions activity has also been heavily funded by debt.A rise in interest rates, or a major shock to the economic system that affects the underlying businesses’ ability to generate the cash to repay such heaving loans, can tip companies into trouble. “You think people would learn, but it never seems to happen that way,” said a fund executive. “It’s going to be ugly for a lot of companies, but it will be good for us.”Private equity-owned companies are particularly vulnerable to higher interest rates because the junk-rated debt that they generally rely on carries floating rates.. This is because no other single sector has arguably done more to bring about the precarious levels of debt hanging over companies than the buyout firms themselves. Now some of them are raising money to cash in on their inevitable fall.In recent years, buyout funds have used larger and larger amounts of debt to fund their takeovers, which they value based on detailed projections.

In a market where interest rates have remained low and stable, and general market conditions have been benign, such financial engineering has worked, prompting buyout firms to get more aggressive with the levels of debt they hang on their companies. “Buyout firms have been testing the limits for the last 18 months,” said Mr Eyerman. The music giant’s headquarters are in Kensington, west London, where several hundred are employed.. Distressed-debt funds, which swoop to take control of companies when they hit the rocks, are surging towards an all-time fund-raising record.

These funds thrive in down markets and, with the FTSE 100 just having experienced one of its worst weeks of losses in three years, the frenetic pace at which they are raising money will fan fears that an economic downturn is imminent.
Unlike in past cycles, private equity giants – including Texas Pacific Group, Carlyle Group and Blackstone Partners – are at the forefront of the movement.Edward Eyerman of Fitch, the credit rating agency, said: “[These funds] are all raising money now because we are at a point in the cycle where a lot of people are anticipating that default rates have only one way to go – and that’s up.”Distressed debt investors wait until companies run into trouble, buy their debt for pence in the pound to gain control, and can then force break-ups or restructurings. Around £50m could be saved by merging headquarters and cutting back office staff, such as accountants and lawyers, he said. The rest would come from a reduction in operating costs.Mr Wallis estimated a fifth of the combined workforce of about 10,600 could lose their jobs. Warner Music employs 4,000 staff, and EMIhas around 6,600 on the payroll.A spokesman for broadcasting union Bectu said if the companies merged, job cuts of 20 per cent would be “optimistic”.Staff in the UK include around 80 at EMI’s Abbey Road studios in north-west London, made famous by The Beatles. The two companies have been sporadically trying to merge since 2000. Schroders, which owns around 2.3 per cent of EMI, has already voiced objections over the company’s plans for a rights issue to help fund the bid.Now another shareholder, who declined to be named but owns around 1 per cent of the company, said EMI’s management had not put a convincing case forward about its merger plans. Fears are growing that more than 2,000 staff could lose their jobs if music giants EMI and Warner Music merge.

They have to put a good case forward.”Around 75 per cent of Warner Music is owned by private equity groups, after their buyout of the company from its former owner, Time Warner.EMI, which includes Gorillaz on its roster of artists, announced plans last month to cut costs by £30m each year, but Warner Music still has one of the highest productivity levels in the industry per employee following cost-cutting.Simon Wallis from stockbrokers Collins Stewart estimates savings of between £160m and £230m a year could be made if the two companies merge. EMI had a $4.3bn (£2.3bn) bid for its US rival rebuffed earlier this month and is expected to make a higher offer soon.
But an EMI shareholder said this weekend that chairman Eric Nicoli had not convinced them that his company should take over Warner Music, rather than be swallowed up itself by the American-based firm.Shareholders and analysts will quiz Mr Nicoli about his plans this week when EMI reports annual results.Warner Music, whose artists include Madonna and James Blunt, is thought to be considering a counterbid for EMI. It is understood that David Trezeguet, Patrick Vieira and Gigi Buffon have already indicated their unwillingness to play in Serie B.Juventus is the world’s fourth-richest club and one of Italy’s most popular teams. Outraged fans are reported to be considering “striking” by not renewing their season tickets.Juventus’s shares have lost nearly half their value in the past fortnight.. Speaking to Italian newspaper Il Giornale, he said: “In the event of repeated unlawful actions … there are various financial penalties and demotion to Serie C.