The Co-op’s proposed £143 million acquisition of convenience grocery chain Nisa has just been given the green light by the latter’s members.
Earlier today at the a meeting of Nisa members held at Elland Road, Leeds, members voted 75.79 per cent in favour of the Co-op’s offer, while 24.21 voted against.
The offer still requires clearance from the Competition and Markets Authority (CMA), which is expected around the end of March next year.
The Co-op‘s offer consists of buying 100 per cent of the shares in Nisa for up to £137.5 million, plus the payment of associated deal costs of up to £5.5 million. This results in a total payment of up to £143 million.
As part of the acquisition, Nisa shareholders would receive an equal initial payment of £20,000, plus deferred share payments and additional rebates payable over four years.
Co-op first announced it would acquire Nisa in September, swooping in after Sainsbury’s decided to withdraw from its exclusive talks with the convenience grocer and wholesaler.
Nisa chairman Peter Hartley said he and the board were “delighted” that their members have approved the Co-op’s takeover bid.
“We as a board are firm in our belief that a combination with the Co-op is in the best interests of Nisa’s members,” he said.
“The convenience store environment is changing rapidly, and is unrecognisable from that which existed when Nisa was founded more than 40 years ago.
“Co-op will add buying power and product range to our offering, while respecting our culture of independence.”
Co-op Food chief executive Jo Whitfield said: “We are delighted that Nisa members have supported our offer and our ambition to create a stronger member-led presence within the UK convenience sector.
“Together Co-op and Nisa can go from strength to strength, serving customers up and down the country and creating real value for them in their communities.
“Our offer remains conditional on CMA approval and we remain in discussions with them.”
The takeover would also see the Co-op taking on the existing Nisa debt of £105 million as well as providing an opportunity for Nisa members to continue to work in independence while having full access to Co-op’s product range, and the opportunity to apply to become a Co-op franchise.
In addition, the Co-op plans to retain Nisa as a standalone business and brand, which has around 3200 stores, but there are ambitions to attract new members to the combined business.
Last month, Nisa reported a positive first half trading for the 26 weeks to October 1, with total sales up 12.4 per cent to £728 million on the comparable period.
In June, the business also announced that it had completed the £120 million refinancing of its debt facilities, providing longer term, cheaper, and more flexible capital for Nisa to further invest in growth over the next three to five years.