Morrisons beats Asda’s owner in race to buy McColl’s after last-minute bids to take control of the collapsed chain
- Morrisons and Asda-owner EG Group made last minute bids for McColl’s
- Morrisons has reportedly won the race to buy the convenience store chain
- McColl’s lenders had rejected an offer from Morrisons on Friday
Morrisons has reportedly beaten Asda-owner EG Group in the race to buy collapsed convenience store chain McColl’s.
The supermarket giant has fended off competition from the petrol station operator with an offer that is expected to see McColl’s stores and workforce preserved in their entirety, according to a report by Sky News.
It comes as the two suitors lodged last-minute bids last night to take control of the collapsed corner shop chain.
Uncertain future: McColl’s, which has 16,000 staff and more than 1,100 shops, went into administration after it was unable to repay debts of nearly £100m
Morrisons and Asda-owner EG Group, run by the billionaire Issa brothers, have been battling for the firm in a takeover tussle that could send shockwaves through the sector.
McColl’s lenders had rejected an offer from Morrisons on Friday that would have seen it take on the firm’s debts and repay them over time.
The bid from Morrisons – the sole supplier to McColl’s – would have protected the ‘vast majority’ of staff and stores as well as its £141million pension plan.
But Morrisons returned yesterday with an improved deal that would see the lenders repaid in full immediately, satisfying one of their key demands, Sky News reported, although the details are unclear.
Now Morrisons seems to have won the race, with the deal set to be structured as a pre-pack administration, meaning Morrisons will buy McColl’s immediately after it enters insolvency proceedings overseen by PricewaterhouseCoopers (PwC), according to the report.
Morrisons has been contacted for comment.
Petrol station giant EG Group is thought to have followed that up with its own last-ditch bid – including a commitment to honour McColl’s pensions, according to sources. EG Group also declined to comment.
It is thought that PwC, which is advising McColl’s lenders, is preparing to set up a showdown between the rival bidders in which they will present their best offers for the group.
McColl’s, which has 16,000 staff and more than 1,100 shops, went into administration last week after it was unable to repay debts of nearly £100million.
It sounded the alarm in November over shortages of key products, lorry drivers and distribution centre workers.
The firm also issued a series of profit warnings and it emerged in February that it was on the brink of collapse. The decision to place the group into administration, a key condition of the offer from EG Group, was condemned by Morrisons as ‘disappointing, damaging and unnecessary’.
Trustees of the company’s pension scheme wrote to the Issa brothers demanding EG Group support its pension commitments, telling them: ‘Any company looking to acquire McColl’s must do the decent thing and ensure that promises made to staff about their pensions are honoured.’
The trustees also wrote to Business Secretary Kwasi Kwarteng urging him to intervene to ensure the scheme’s 2,200 members are protected.
Labour work and pensions spokesman Jonathan Ashworth urged ministers not to ‘stand by and do nothing’, but to protect the pensions.