UK retail group the Co-operative has made a £137.5 million formal offer to acquire Nisa, which operates a network of member-owned convenience stores across the country.
Nisa's board has accepted the offer, however, it is expected to be put to Nisa members to vote upon in November.
“The board was unanimous in its decision to recommend the Co-op offer," said Peter Hartley, chairman of Nisa.
"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."
Merger Details
The Co-op's offer includes the purchase of a 100% stake in Nisa for up to £137.5 million, as well as the payment of associated deal costs of up to £5.5 million.
The Co-op says that it plans to retain Nisa as a standalone business and brand, including its 1,190 members and 3,200 stores. It adds that its aim 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," said Jo Whitfield, food CEO of the Co-op.
"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."
If the deal is accepted by the group's members next month, it will then be subject to approval from the UK's Competition and Markets Authority (CMA).
“If our offer is accepted by Nisa members and approved by the CMA, we can deliver a win-win for two member-led, community-focused organisations, and, in the process, create a distinctive footprint within the growing UK convenience retail sector," added Whitfield.
Convenience Consolidation
The battle to consolidate the convenience-store market in the UK is ongoing, and Nisa has been the subject of merger talks for several months.
In June, it was reported that Sainsbury's was close to submitting a formal bid to acquire the convenience retailer, which was seen as a counter to Tesco’s £3.7 billion acquisition of Booker.
However, following the CMA's in-depth investigation into the Tesco/Booker deal, which is expected to conclude later this month, Sainsbury's halted its potential £130 million takeover.
At the end of August, it was then reported that that the Co-operative had entered into exclusive negotiations to acquire Nisa.
Earlier this week, Nisa posted a 12.4% increase in sales in the first half of its financial year, following the announcement that CEO Nick Read had resigned from his position.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
