EG Group poised to launch rival rescue bid for stricken retailer McColl’s
Blackburn-based EG Group is set to swoop for the collapsed convenience retail chain McColl’s.
The petrol forecourts to fast food and Asda supermarket group, led by the billionaire Issa brothers Zuber and Mohsin, have tabled a pre-pack deal to see off a rival bid by Bradford-based supermarket chain Morrisons, according to Sky News (May 6).
McColl’s, based in Brentford, Essex, operates around 1,400 stores around the country, and employs up to 16,000 staff.
It made a lunch time announcement on the stock exchange that it would appoint PwC as administrator, saying its “senior lenders have this morning declined to further extend the waiver of the company’s banking covenant… in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible”.
The statement added: “In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably therefore left with no choice other than to place the company in administration, appointing PriceWaterhouseCoopers LLP as administrators, in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible.”
The Morrisons bid is believed to have agreed to repay loans made by NatWest Bank to McColl’s, but over several years.
However, EG Group is reported to have agreed to the immediate repayment of McColl’s lenders’ loans.
Sources claim that, under the EG proposals, lenders could receive anything from 90p in the pound, to full repayment.
Latest reports, though, suggest that Morrisons has returned with an improved offer on the basis it would repay loans immediately.
It is unclear how many of the 16,000-strong McColl’s workforce would be retained if the EG Group bid goes through.
McColl’s is a partner of Morrisons, operating hundreds of smaller shops under the Morrisons Daily brand.
The chain raised £30m from shareholders last year to invest in expanding its Morrisons Daily convenience stores, but at the time it warned customer footfall had been hard hit by the pandemic.
Following there official appointment, administrators could consider bids by this evening (May 9)
EG Group has been contacted for comment.
