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Co-op makes £140m revised offer to buy UK convenience store chain Nisa

RBR Staff Writer Published 01 September 2017

Convenience food retailer, The Co-operative Group (Co-op) is turning out to be the frontrunner to acquire UK convenience store chain Nisa with a revised offer of £140m.

The company has entered into a period of exclusivity with Nisa which it says will give it scope to perform more detailed due diligence in the coming days.

Co-op hopes that it can be in a position where it can place the proposal to Nisa members once it is done with the exclusivity and gets the approval of its own board.

The convenience food retailer’s move comes just days after supermarket chain Sainsbury’s decided to hold back on its £130m reportedly due to possible completion concerns.

According to Nisa chairman Peter Hartley, the ongoing talks with Co-op have been constructive and pragmatic although key elements are yet to be resolved.

Hartley in a letter to Nisa members wrote: “As you are all aware our business and the convenience sector continue to evolve at pace and the board of Nisa will continue to review serious queries and offers which emerge (within the constraints of any agreed exclusivity period) and which it believes are in the best long-term interest of the members.”

In the past, Co-op had bid for Nisa but could not move ahead with it as the latter failed to retain a major supply contract to McColl’s which accounts for a third of its £1.4bn net revenue.

In July 2016, Co-op divested 298 smaller food stores to McColl’s Retail Group to raise £117m as part of its strategy to focus more on convenience business.

Headquartered in Scunthorpe, Nisa is a co-operative which was founded in 1977.  It is owned by more than thousand independent shopkeeper members who operate over 3,500 stores.

Image: A Nisa local store pictured in 2012. Photo: courtesy of Betty Longbottom/Wikipedia.org.