Doubts persist about Nisa vote on Co-op takeover

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A section of the Nisa membership is becoming increasingly vocal and agitated about the proposed takeover by the Co-operative Group, as the terms of the deal are discussed at a second round of regional member meetings.

Tension has been rising since a meeting in Birmingham last Wednesday when the team representing the Co-op left the room, to the surprise of some of the Nisa membership. A member of the Co-op team has confirmed to C-Store that the exit was a planned adjournment to continue the discussion about the propsed deal in an adjoining room while the main meeting discussed internal Nisa matters, but some members have been upset by the move.

Internal communications by Nisa members, seen by C-Store, suggest that the required 75% vote is unlikely to be achieved and that the deal is in jeopardy. Central to the tension is the amount of cash members are being offered upfront, compared to how much is being deferred over a period of four years depending on performance. The offer comprises a payment of up to £20,000 per shareholder, a deferred payment of up to £1,654 per share and an extra payment of up to 1% of rebateable sales for each shareholder during the four years to the end of March 2022, payable quarterly from June 30 2018 onwards. As such, the Co-op would be benefiting from Nisa retailers’ volumes for a considerable period before making full payment for the acquisition.

With the shareholder vote scheduled for November 13 and a grim picture of Nisa’s prospects as an independent entity being painted at the meetings, members also feel they are being pressurised into making a quick decision on their future, rather than being able to compare the Co-op’s offer with those that might potentially be offered by other partners.

A Co-op spokesman confirmed that the deal was still on the table, saying: “The feedback we have had from the regional meetings has been very positive. The meetings in Edinburgh, Leeds and Birmingham have provided us with a further opportunity to talk in detail around the financial offer being made to Nisa members and the exciting future proposition we believe Co-op could provide.

“We were especially pleased to be able to clarify points around the proposed transaction structure, which had been issues raised in previous meetings by Nisa members.

“We’re looking forward to seeing more Nisa members in the forthcoming events in Belfast, Bristol and London.”

Readers' comments (5)

  • The greed of some of these NISA shopkeepers is going to be end of NISA.There are NO other takers for this failed entity.Bibby Group might swoop late and get it for peanuts mind you

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  • The 1% rebate is ridiculous. How easy would it be, particularly in a period of food inflation, to increase wholesale prices to cover this "payout"? If the Co-op wants to buy Nisa they should make a payment per share just as they would to buy a non-mutual company.

    Incidentally the Co-op group may live to regret showing how a mutual company can be acquired. If a mutual like Nisa can be sold like this then a mutual like the Co-op can be sold the same way. They wouldn't even have a moral argument.

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  • An email was sent to members over the weekend. If the contents of this email were accurate, this will send shockwaves.

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  • there are many of us who like what co-op can offer but the way it has been railroaded with no sufficient time given for members to discuss , and adding to that members having to squeeze information out of nisa negotiators , including latest trading figures which by the way potential buyer would have seen ..... co-op is giving assurances but no guarantees . all their warm words have riders which means BIG ZERO . that is why there is lack of trust between members and board and co-op . those who predict doom and gloom to force decision for YES vote are wrong . nisa is the only supplier which is mutual who work for its members and cherry on top is that there is no other supplier on market who can supply the range and price . like an ex CC member said ' joining nisa was lighting on a bulb ! '

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  • Whoever designed the Camel was perhaps also responsible for the Co-Op offer for purchasing NISA. But then you get that when a company is run by committees! It’s too complex and appears to hedge its bet on future returns rather than buying the company outright with lower valuation. The other problem the Co-op has is that they are buying a membership’s turnover which may or may not stay loyal with the company and subsequently affect future earnings for their investment. Bearing in mind that £137m & about £100m of acquired debt which the shareholders are directly & indirectly responsible for in my opinion sounds like a fair deal to me as an outsider. You can’t have your cake & eat it comes to mind. I agree with the suggestion that having practically no asset value leads me to think that the current offer is fair. If the NISA membership can’t guarantee future earnings to the Co-op by staying loyal than I can’t see why the Co-op wants to pour money into a business that may struggle with all the challenges of consolidation currently facing our sector.
    I am sure you agree that you are only worth what the market is prepared to pay you at any given time. There is no bidding war going on here, just one and only credible buyer so far? In this case you only have one ace up your sleeve! I personally as a retailer wants NISA to succeed but they will regret it if they reject this offer.

    A revised offer may or may not come? Then what? I would rather bet my livelihood on the future partnership with the Co-op with better supply chain than risk all on the current faux pas which may linger on for many months to come, wasting time on the future direction of the company. I don’t believe that NISA management are painting an unfair picture for personal gain. Members quite frankly should instead concentrate on their future rather than worry about what the others are getting out it. Large chunks of turnover has gone which will no doubt make grim reading and will of course be reflected in next year’s accounts valuing the company even less.

    Objectivity & pragmatism is more important here than conflating incidental facts about management’s intentions with conspiracy!!

    Arjan Mehr Londis Bracknell

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