Co-op granted exclusive access to Nisa as buy-out moves closer
By Scunthorpe Telegraph | Posted: 30 Aug 2017
THE Co-op has entered into exclusive negotiations with Nisa as it seeks to buy-out northern Lincolnshire's delivered wholesale specialist.
The move for the Scunthorpe giant follows a step back by initial suitor Sainsbury’s, as it awaits results of a competition enquiry into Tesco’s bid for sector rival Booker.
Nisa chairman Peter Hartley, pictured, made the announcement in a memo to member owners of the £1.2 billion turnover business, where activity is centred on Normanby Enterprise Park. Hundreds are employed directly there, as well as with distribution and logistics partner DHL.
He said: “The board of Nisa has held a number of positive discussions with the Co-op in recent weeks, following its reaffirmation of interest in making an offer for your company. During these discussions the Co-op has confirmed, subject to further due diligence, its intention to progress matters as quickly as possible, in the hope that a transaction can be finalised. The Co-op is willing to incur costs on its own account to do this.
“Key elements of the discussion remain ongoing and while these are not yet resolved the conversations with The Co-op to date have been pragmatic and constructive. Your board continues to focus on resolving them in a manner which is satisfactory to members.
“As a result, and in line with the board of Nisa’s duty to act in the best interest of all Nisa members, your board has granted The Co-op a period of exclusive due diligence from today."
Like Nisa, The Co-op is also owned by members, which may well make the deal more palletable to more than 500 people who will have a say nationwide. However, it brings with it huge complexities also.
Mr Hartley, who took the helm in October last year, having been on the board since December 2012, said: "Subject to the results of the due diligence, it is anticipated that The Co-op could be in a position to make a final offer to the members for your consideration.
“Should an offer of merit emerge from this process, it will be for you, the members, to decide on whether to accept it.”
Speculation about a potential sale was confirmed in June's annual results, with the focus on the second largest supermarket in Britain. It is, however, also still bedding in a huge purchase of Argos, with a major roll-out of that brand in stores nationwide.
Interest will have been buoyed by the 18 per cent increase in profits announced then, exceeding the £8.5 million target by £100,000, despite sales of £1.2 billion coming in 2.6 per cent lower than 2016.
A spokesman for The Co-op said: “We can confirm that we’ve entered into a period of exclusivity with Nisa, which will provide the opportunity for us to carry out more detailed due diligence in the coming weeks.
"Following this period and subject to approval from our board, we hope to be in position where we can put forward an offer to Nisa members."