Morrisons triumphs in the battle to gain control of McColl’s Retail Group, one of Britain’s largest grocery chains, after the latest offer to buy its union from bank lenders.
Sky News may reveal that the supermarket giant has sent off 11-hour competition from EG Group, the gas station operator, with an offer that will keep McColl’s stores and workforce intact.
The deal will be structured as a pre-packaging administration, meaning Morrisons will buy McColl’s as soon as it enters insolvency proceedings monitored by PricewaterhouseCoopers (PwC).
On Friday, Morrisons said he believed there was no reason for the corner store empire to be declared insolvent, but the pace of the weekend, with McColl swaying on the brink of collapse, left PwC out of time to finalize a solvent deal, according to an insider. , close to the company.
Morrisons’ commitments to McColl’s future include maintaining all 1,100 stores and 16,000 workers, as well as meeting all of its outstanding retirement obligations, the insider added.
The improved offer to McColl’s creditors, which will pay them off immediately in full, meeting their core demand, was also among the deciding factors.
Morrison’s status as McColl’s main creditor is also believed to have been influential.
PwC is expected to make an announcement later Monday.
Paradoxically, the result may have been better for McColl’s than the solvent sale of Morrisons, which said Friday it would keep “most” of its stores and jobs.
The result was a struggle for the future of one of the most unpopular companies in the London stock market, with its shares falling from an estimate of £ 200 million to become almost useless.
On Friday night, the EG Group appears to have seized McColl’s takeover, although its stance on the company’s two pension schemes has begun to attract political scrutiny.
McColl’s creditors rejected a proposal to bail out Morrisons’ solvent funds on Friday, which would involve transferring more than £ 100 million in debt to the supermarket chain, but to be repaid in full after the loans expire.
Lenders, including Barclays, HSBC and the state-sponsored NatWest Group, sought immediate repayment of their loans, which initially led them to benefit from the EG Group.
A spokesman for the trustees said over the weekend: “Any company that wants to acquire McColl’s must do the right thing and ensure that the promises made to staff about their pensions are kept.
“We will be extremely surprised if an organization that has an interest in demonstrating good corporate citizenship uses a package administration in advance to stop supporting the schemes, with absolutely no involvement with the trustees.
McColl’s is an important partner of Morrisons, running hundreds of smaller stores under the Morrisons Daily brand.
The company, which is listed on the London Stock Exchange but was suspended on Friday, employs about 6,000 people on a full-time basis.
He raised £ 30 million from shareholders in a cash conversation just eight months ago.
Confirmation of administrative procedures will make it the biggest insolvency in the UK retail sector in terms of labor force since the collapse of the Edinburgh Woolen Mill Group in 2020.
Since then, both Debenhams, which employs about 12,000 people, and Sir Philip Green’s Arcadia Group, which had a workforce of approximately 13,000, have also gone bankrupt, falling victim to changing retail habits and the pandemic.
Morrisons, McColl’s, EG and PwC declined to comment.
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