Morrisons table fresh offer for McColl’s to stave off competitor
Morrisons has tabled a new bid for the stricken McColl’s Retail Group as it looks to keep its partner away from competitor Asda’s owners.
It’s been reported that Morrisons which on Friday said they’d “put forward a proposal that would have avoided” the news of the McColl’s appointing PwC as administrators, has now submitted an improved offer to the retailers lenders which would mean they were repaid in full immediately – an issue which was understood to be a sticking point with the previous offer.
Details of the new offer remain unclear but Morrison’s has promised to retain the “vast majority of jobs and stores” as it looks to sure up a partnership which has reportedly performed strongly, with Morrison’s Daily stores seeing like-for-like sales growth that is at least 20% better than non-converted McColl’s stores.
This revised offer comes as it was suggested on Sunday afternoon that PwC was preparing for a two way shoot out later today between EG Group and Morrisons, with both being asked to submit best and final offers, however the accountancy firm declined to comment.
McColl’s fall came despite the fact that last year it raised £30m from shareholders to invest in expanding its Morrisons Daily convenience stores. Despite the success of its partnership with Morrisons the company had previously warned that customer footfall had been hard hit by the pandemic.
With 16,000 jobs at risk if the retailer does fold it is believed that lenders have been demanding immediate repayment and that this was the reason Morrisons’ first offer was rejected, with Morrisons.
On Friday EG Group, the petrol forecourts to fast food company led by the billionaire Issa brothers Zuber and Mohsin, who also acquired Asda last year had reportedly tabled an offer that would see lenders receive 90 pence to the pound although other sources suggested they would be repaid in full. The BBC has also reported that it understands “that EG Group has now met [Morrisons new] bid with a revised proposal”.
Discussions further evolved over the weekend when trustees of the company’s pension scheme demanded reassurance that promises made by McColl’s would be kept.
In a statement they said: “Any company looking to acquire McColl’s must do the decent thing and ensure that promises made to staff about their pensions are honoured.
“We would be extremely surprised if any organisation with an interest in demonstrating good corporate citizenship were to use a pre-pack administration to cease supporting the schemes, with absolutely no engagement with the trustees.”
If administration is confirmed today it would be the largest in the retail sector based on size of work force for two years, since Edinburgh Woollen Mill Group collapsed in 2020