The Co-op has emerged as the new favourite to acquire Nisa, bumping off Sainsbury’s which had paused its talks with the convenience chain.
The board of Nisa Retail has granted a period of exclusivity to the Co-op to negotiate a takeover of the member-owned business.
According to Sky News, the Co-op is believed to have informed Nisa it was prepared to pay around £140 million for the business, despite the recent loss of a wholesale supply deal with McColl’s to Morrisons.
The news comes just days after Sainsbury’s decided to put its £130 million acquisition talks with Nisa on hold until it has a better understanding of how the country’s peak competition authority would handle the deal.
The decision followed concerns expressed by the Competition and Markets Authority (CMA) over the proposed £3.7 billion merger between Tesco and grocery wholesaler Booker.
The Co-op Group has now moved into pole position to acquire Nisa’s 300-strong convenience stores, which was confirmed by Nisa chairman Peter Hartley in a message circulated to shareholders and the media this morning.
“The board of Nisa has held a number of positive discussions with the Co-op in recent weeks, following its reaffirmation of interest in making an offer for your company,” Hartley said.
“During these discussions the Co-op has confirmed, subject to further due diligence, its intention to progress matters as quickly as possible, in the hope that a transaction can be finalised. The Co-op is willing to incur costs on its own account to do this.
“Key elements of the discussion remain ongoing and while these are not yet resolved the conversations with the Co-op to date have been pragmatic and constructive. Your board continues to focus on resolving them in a manner which is satisfactory to members.
“As a result, and in line with the board of Nisa’s duty to act in the best interest of all Nisa members, your board has granted the Co-op a period of exclusive due diligence from today.
“Thereafter, and subject to the results of the due diligence, it is anticipated that the Co-op could be in a position to make a final offer to the members for your consideration.
“Should an offer of merit emerge from this process, it will be for you, the members, to decide on whether to accept it.”
Hartley concluded by stressing that there was no guarantee an offer could be forthcoming with the Co-op, and that they would continue to review serious queries and offers which emerge.
Sainsbury’s initial acquisition proposal, which is thought to be a in direct response to Tesco’s imminent deal with Booker, came under fire from some Nisa members as it could threaten to demutualise the company.
Nisa’s 1400 members, who hold up to 250 shares each in Nisa Retail and will get the final vote on any proposal, had previously blocked two takeover attempts from rival Costcutter.