US private equity group Clayton, Dubilier & Rice (CD&R) has delayed plans to raise £6.6 billion in debt to finance its agreed buyout of Bradford-based supermarket giant Morrisons as the omicron variant adds to market volatility, according to a Bloomberg report.

The report said banks are postponing the massive debt package required to finance CD&R’s buyout.

Shareholders of Morrisons approved a roughly £7 billion cash takeover offer from CD&R in October.

Including debt, the takeover deal was valued at just under £10 billion.

CD&R won an auction for Morrisons with an offer of £2.87 a share, while a consortium led by Softbank-owned Fortress Investment Group had offered £2.86 a share.

Banks including Goldman Sachs and BNP Paribas were due to start marketing the syndicated bond and loan financing for the deal in November.

This process has now been pushed back until next year.

CD&R and Morrisons did not immediately respond to requests for comment.

Mark Benbow, high-yield fund manager at Edinburgh-based Aegon Asset Management, told Bloomberg: “The deal was touted to be coming a few weeks back and the recent market weakness has clearly put to bed any thought of them bringing the deal this year.

“It’s probably for the best, sentiment is softening and UK capital providers have had to take down both Asda and B&M in recent weeks.”

CD&R intends to arrange debt financing of up to £6.6 billion — including £2 billion of term loans, a £1 billion revolving credit facility and £3.6 billion of bonds.

“We’re entering into a LBO dangerzone for bondholders now,” Rodolphe Ranouil, fund manager at Cbh Compagnie Bancaire Helvetique SA, told Bloomberg.

“[They] are facing significant repricing risks due to the amount of potential takeover targets that could result in bond prices falling.”