The board of Nisa Retail has unanimously recommended to its shareholders an offer of up to £137.5 million from The Co-op Group.
The Co-op Group’s offer to buy 100% of the shares in Nisa for up to £137.5 million, plus the payment of associated deal costs of up to £5.5 million, would result in a total payment by the Co-op Group of up to £143 million. Nisa shareholders would receive an equal initial payment, a deferred share payment payable over three years, as well as additional rebates payable over four years.
The Co-op would also take on the existing Nisa debt of £105 million as well as providing additional benefits, which the press statement outlines as:
• The opportunity to source products from the Co-op, which recently reported its fourteenth consecutive quarter of like-for-like sales growth.
• The ability to significantly enhance the existing product offer, especially within the fresh and chilled categories, with the Co-op’s own-brand range.
• The ability to source a wide range of products from a provider with a history of supporting a varied portfolio of stores, from small convenience stores right up to 35,000sq ft.
• The opportunity to partner with a like-minded business which is member-owned, community-focused and ethically-guided.
• The continuation of key aspects of Nisa members’ independence to fully source the range that best suits their stores, and to operate those stores how they want.
• The possibility to be part of regular senior management engagement meetings, held at a local level, and the ability to continue to have a voice on how Nisa is run.
• The opportunity to apply to become a Co-op franchise, benefiting from the Co-op brand and additional services.
The acquisition of Nisa would also reportedly bring benefits for the Co-op, allowing it to strengthen its presence in the wholesale convenience sector, in turn enhancing its scale and buying power for the benefit of all customers, while extending the reach of the Co-op brand into new communities. It would also provide the opportunity to support like-minded independent retailers, with a clear sense of commitment to serving and supporting their local communities.
The Co-op plans to retain Nisa, which has around 1,190 members and services 3,200 stores, as a standalone business and brand. The ambition is to attract new members to the combined business.
The terms of the acquisition, which remain conditional on the approval of Nisa members and CMA clearance, will be explained to members today (10 October). The Co-op and Nisa teams will be out on the road at regional events in the coming weeks to listen to members’ views and answer any questions they may have. A vote of the membership will be held in early November.
Peter Hartley, chairman of Nisa, commented: “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. The Co-op offers the right blend of buying capability, convenience expertise, and respect for the heritage of our business, to enable our members to fully thrive in this new partnership.”
Jo Whitfield, food CEO of The Co-op, added: “This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector. 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.”
Tel: Nisa Retail (01724) 282028Published Date: October 10, 2017