Morrisons set to win battle for bust McColl’s
Morrisons looked set to emerge victorious in a takeover battle for McColl’s today, after a battle over the future of the convenience chain.
The future of McColl’s was left hanging in the balance after Morrisons and EG Group, backed by the billionaire Issa brother who also own Asda, sought to outbid one another over the weekend to take control of McColl’s as administration looms.
The bid from Morrisons is due to be announced as the preferred bidder for McColl’s, despite an improved offer from EG Group, according to Sky News.
McColl’s admitted on Friday that it is likely to collapse without any fresh funding. PwC has been lined up to act as administrators.
Sources close to the company said a notice of administration could be placed with the courts as early as today if the latest takeover bids are rejected.
The news caps a frenzied few days as the two potential suitors tried to tempt McColl’s lenders with a rescue package.
On Thursday night, Morrisons tabled a last-minute bid to save the company from administration. The plan would secure around 16,000 jobs and allow most of the 1,300 high street stores to stay open.
That was likely to be structured as a solvent deal, rather than a pre-pack administration, with Morrisons taking on McColl’s pension liabilities and around £170 million of debt.
EG Group, backed by the billionaire Issa brothers, then emerged with a potential pre-pack deal and promised to repay lenders’ loans immediately - improving the Morrisons offer.
Morrisons lodged a counter offer over the weekend, also promising to repay lenders immediately and in full.
McColl’s has been pushed to administration by soaring costs and supply chain problems.
Last week, the retailer warned trading of its shares was set to be suspended after the company admitted that its ongoing emergency funding talks mean it will miss the deadline to file annual accounts.
It previously raised £30 million from shareholders to boost its presence through its existing partnership with Morrisons, but said that the business was still reeling from being hit by diminished footfall in the coronavirus pandemic.