Morrisons wins last minute bid to buy McColl’s
Morrisons has won the battle to acquire stricken McColl’s Retail Group following a fresh bid to take control.
The supermarket chain saw off rival bid from Asda owner EG Group in a last ditch attempt to save it from collapse.
Morrisons will now buy McColl’s in a pre-pack deal structured by PwC.
The supermarket which is, Britain’s fourth biggest grocer, is McColl’s key wholesale supplier and formed a tie-up to convert hundreds of McColl’s shops to Morrisons Daily convenience stores – a project which led to a £30m fundraise last year as it looked to expand the programme.
Morrisons will retain all 1,160 stores and 16,000 workers, as well as honouring all of its outstanding pension obligations.
David Potts, Morrisons chief executive, said: “Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders. This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners.
“We all look forward to welcoming many new colleagues into the Morrisons business and to building on the proven strength of the Morrisons Daily format.”
McColls appointed administrators on May 6 after it revealed it was unable to repay debts of nearly £100m and lenders withdrew their support.
Morrisons tabled an offer last week for the group to reach a solvent sale, however this was rejected.
Asda owners EG Group is also thought to have followed that up with its own last-ditch bid – including a commitment to honour McColl’s pensions, with reports over the weekend that it would be a two-way shoot out between supermarket and the petrol forecourt business,
However, an improved offer from Morrisons over the weekend saw the supermarket giant win at the eleventh hour.
In a statement Morrisons has said that in addition to retaining all stores and employees the deal will see the secured lenders and preferential creditors aid in full with a distribution also expected to unsecured creditors.
An EG Group spokesperson said: “EG Group notes today’s announcement by PwC in relation to McColl’s Retail Group following a pre-pack administration process.
“EG confirms that it was interested in rescuing the McColl’s business. Our proposal would have safeguarded the UK jobs of 16,000 McColl’s colleagues, increased the pay of all hourly-paid colleagues aged 18 and over to £10.05, maintained all the currently trading stores, and ensured continued provision of invaluable community services, such as Post Office counters.
“Moreover, EG Group had proposed to maintain the link between McColl’s pensions schemes and the business, respecting historical promises made to the members of the schemes.
“EG also hopes the announcement will bring to an end the uncertainty for the hard working colleagues at McColl’s and wishes them the best for the future.”