Nisa board welcomes £137.5m offer from The Co-op
DEAL ON THE TABLE: Peter Hartley and the board have unanimously welcomed the offer from The Co-op.
By Scunthorpe Telegraph | Posted: 10 Oct 2017
A £137.5 million offer for Nisa Retail from The Co-op has been unanimously recommended by the board of the Scunthorpe wholesale giant.
Members are being urged to accept, stating it would bring significant immediate and long-term value for them, allowing traders to retain independence while remaining part of a key organisation in the growing convenience sector.
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, currently enjoying its 14th consecutive quarter of like-for-like sales growth would also take on the existing Nisa debt of £105 million, as well as associated deal costs of £5.5 million, bumping the total deal value up to almost £250 million.
Peter Hartley, chairman of Nisa, said: “The board was unanimous in its decision to recommend The Co-op offer. 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.”
The Co-op plans to retain Nisa as a standalone business and brand, which will ease any concerns over the future of the Scunthorpe headquarters and major specialist wholesale delivery operation behind the 3,200 stores.
It is seen as a like-minded operation, and the full terms of the acquisition, which remains conditional on the approval of Nisa members and Competition and Markets Authority clearance, will be explained to members today (Tuesday, October 10). Both teams will then be out on the road at regional events in the coming weeks to explain the offer to members and answer questions. A vote will be held in early November.
Jo Whitfield, food chief executive at The Co-op, said: “This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector. We believe we have presented a compelling offer for Nisa members, with a future proposition that would bring them our award-winning own label products and wide range.
“Over the past three years, Co-op Food has been completely transformed through a convenience-led focus on delivering great value products for our members and creating real value for them and their communities.
“Co-op and Nisa have achieved so much on their own to support local communities, but together I believe we can go from strength to strength.
“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.
“We are looking forward to meeting Nisa members at the roadshow events in the coming weeks, listening to their views and answering their questions.”
Enhanced scale and buying power has also been flagged up, aiding price competitiveness.