Nisa gets into bed with Co-op in £143 million takeover
The offer comes after the Co-op replaced Sainsbury’s as the front-runner in the process earlier this year.
The board of convenience store operator Nisa has recommended that its members accept a £143 million takeover bid from the Co-op Group.
The offer comes after the Co-op replaced Sainsbury’s as the front-runner in the process earlier this year and would see the group take on Nisa’s debts of £105 million.
A combined entity would see the number of stores the Co-op supplies almost double to 7,000.
The Co-op has 3,800 outlets while Nisa has 3,200.
Nisa said the tie-up will give the group access to greater scale and Co-op ranges, with chairman Peter Hartley adding: “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.”
Nisa will be retained as a standalone business and brand, and the offer price includes £5.5 million of associated deal costs that the Co-op will pay.
Under the terms of the deal, Nisa shareholders will receive an equal initial payment, a deferred share payment payable over three years, as well as additional rebates payable over four years.
Nisa’s 1,190 shopkeeper members will vote on whether to accept the deal in early November.
The deal comes as the supermarket sector is in flux following the announcement of Tesco’s £3.7 billion merger with wholesaler Booker, which is currently undergoing a Competition and Markets Authority (CMA) probe.
Jo Whitfield, food CEO 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.”
The deal still requires regulatory approval from the CMA.