Venture Capitalists Are Targeting Sainsbury!

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1995

Venture capitalists Texas Pacific and Kohlberg Kravis Roberts are this week expected to bid for the supermarket group, J Sainsbury.

Their take-over will mean sackings, wage cuts, speed ups and price increases.

Texas Pacific is already well known for the activities of its Gate Gourmet London company.

It sacked 700 workers by megaphone, and brought hundreds of replacement workers and a survival programme into its Heathrow plant.

On the day workers were sacked by megaphone, security guards were present at the Heathrow plant from a firm that advertised as being active in Kosovo, Iraq and Afghanistan.

There were 12 bodyguards brought onto the site and armed riot police were called onto the site on the day of the mass sackings.

Sainsbury workers now know what to expect.

Today, Texas Pacific and Kohlberg Kravis Roberts are due to make an offer worth $44bn (£22bn) for TXU.

TXU is the top power company in Texas and the deal will break the record for the biggest takeover by private equity raiders.

It would be the third time in four months that the record has been broken, most recently with Blackstone’s $38.9bn offer for Equity Office Properties.

Known as private equity companies, venture capitalists use clients’ money and borrowed money to buy whole companies, before asset stripping and driving up the exploitation of the workforce, then selling on at a massive profit.

Meanwhile, the Labour Party is to declare donations from three leading venture capitalists worth a total of £750,000.

Two of the donors were Nigel Doughty and Sir Ronald Cohen.

Doughty is chairman of Doughty Hanson, a UK-based private equity firm.

He donated a similar amount to the Labour Party last May, and another £250,000 before the 2005 general election. He also gave £5,000 last March.

Cohen founded the private equity company Apax in 1971. He is a supporter of Chancellor Brown and since 2001 and until his most recent donation, made yearly contributions totalling £1.3 million.

A third donor, Jon Aisbitt, is a former partner at merchant bank Goldman Sachs, and is currently a non-executive director of Man Group, a hedge fund management company.

Cabinet Minister Peter Hain yesterday defended Labour accepting donations from venture capitalists.

He said: ‘I think that it is right that we accept donations from people who want to contribute to the Labour Party and want to keep us in power.’

GMB leader Paul Kenny replied: ‘Only in the last few weeks has the GMB campaigning put names and faces to the multi-millionaire elite who run the private equity industry and made clear what they do.

‘Until that time most people in the Labour party will not have been clear about where this money was coming from.

‘Maybe it is now time for the NEC to look into the background of where this money is coming from.’

The GMB plans to demonstrate in Frankfurt tomorrow February 27 over the growing threat to jobs posed by private equity buyouts.

The demonstration will take place outside the European Private Equity and Venture Capital Summit being held in the German city.

The union will be bringing workers from Birds Eye and the Automobile Association, whose jobs have been lost or threatened after private equity buyouts by Permira, and from National Car Parks where venture capitalist owner 3i has refused to recognise the union.