The board of UK convenience chain Nisa has unanimously recommended to its shareholders a £137.5 million takeover from The Co-op Group.
In a statement, Co-op said that if the deal goes ahead it would bring ‘significant immediate and long-term value for Nisa members’, including access to greater scale, while also enabling them to remain part of a member-owned organisation.
The deal would see Co-op buy all Nisa shares for up to £137.5 million, plus the payment of associated costs of up to £5.5 million. Co-op would also take on the existing Nisa debt of £105 million.
The acquisition would bring clear benefits for the Co-op, allowing it to strengthen its presence in the wholesale convenience sector, in turn enhancing its scale and buying power, while extending the reach of the Co-op brand. It would also provide the opportunity to support like-minded independent retailers.
Co-op plans to retain Nisa as a standalone business and brand, which has around 1,190 members and services 3,200 stores. The ambition is to attract new members to the combined business.
This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector
Nisa chairman Peter Hartley said: “The board was unanimous in its decision to recommend the Co-op offer. While the business has made significant strides in recent years, we firmly believe that the combination with the Co-op is in the best interests of our members.
“The Co-op offers the right blend of buying capability, convenience expertise, and respect for the heritage of our business, to enable our members to fully thrive in this new partnership.”
Co-op Food CEO Jo Whitfield added: “This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector. We believe we have presented a compelling offer for Nisa members, with a future proposition that would bring them our award-winning own label products and wide range.
“Over the past three years, Co-op Food has been completely transformed through a convenience-led focus on delivering great value products for our members and creating real value for them and their communities.
“Co-op and Nisa have achieved so much on their own to support local communities, but together I believe we can go from strength to strength.”
Earlier this year, Tesco acquired wholesaler Booker for £3.7 billion, to create one of the largest combined food businesses in the UK. Other supermarkets have consequently sought to expand in the wholesale sector as a response to the deal.
The Co-op offer is expected to be put to Nisa members to vote upon in November.
© FoodBev Media Ltd 2018
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