Morrisons WINS battle to buy McColl’s and pledges to keep all 1,100 stores and 16,000 workers after beating billionaire Asda-owning Issa brothers to take control of the collapsed chain
- Offer expected to see McColl’s stores and workforce preserved in their entirety
- McColl’s into administration after it was unable to repay nearly £100m of debt
- Issued series of profit warnings and had been on verge of collapse for months
Morrisons today won a battle to take over collapsed convenience store chain McColl’s in a move that will secure the future of 16,000 jobs and 1,100 shops.
The supermarket giant has fended off competition from the billionaire Issa brothers, who also own Asda, with an offer that is expected to see McColl’s stores and workforce preserved in their entirety.
It comes as the two suitors lodged last-minute bids last night to take control of the collapsed corner shop chain, which is one of Britain’s largest.
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
Morrisons and the Issa brothers’ EG Group have been battling for the firm in a takeover tussle that could send shockwaves through the sector.
McColl’s lenders had rejected an initial 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, although the details are unclear.
Now Morrisons seems to have won the race, according to Sky News, 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 PwC.
Morrisons, which is now owned by US private equity firm Clayton, Dubilier & Rice – 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.
Zuber and Mohsin Issa, self-made billionaires who run a sprawling retail empire that includes Asda
McColl’s 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’.
Morrisons is now owned by US private equity firm Clayton, Dubilier & Rice
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.