Nisa board recommends £137.5m Co-op offer to members

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The board of Nisa Retail has unanimously recommended to its members a takeover offer of up to £137.5m from The Co-operative Group.

The offer would bring Nisa members access to greater scale and the full Co-op range, as well as retention of their independence. The Co-op plans to retain Nisa as a standalone business and brand, but Nisa retailers would also be able to apply to become Co-op franchisees.

The Co-op Group’s offer to buy 100% of the shares in Nisa for up to £137.5m, plus the payment of associated deal costs of up to £5.5m, results in a total payment of up to £143m.

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 Group would also take on the existing Nisa debt of £105m.

Nisa members will get to vote on the offer in early November.

Nisa said the deal would provide its members with the following benefits:

  • The opportunity to source products from the Co-op, which recently reported its 14th consecutive quarter of like-for-like sales growth.
  • The ability to significantly enhance the existing product offer, especially within the fresh and chilled categories, with Co-op’s own-brand range.
  • The ability to source a wide range of products from a provider with a history of supporting a varied portfolio of stores, from small convenience stores right up to 35,000sq ft.
  • The opportunity to partner with a “like-minded business which is member-owned, community-focused and ethically guided”.
  • The continuation of key aspects of Nisa members’ independence to fully source the range that best suits their stores, and to operate those stores how they want.
  • The possibility to be part of regular senior management engagement meetings, held at a local level, and the ability to continue to have a voice on how Nisa is run.
  • The opportunity to apply to become a Co-op franchise, benefitting from the Co-op brand and additional services.

The terms of the acquisition, which remain conditional on the approval of Nisa members and CMA clearance, will be explained to members today (Tuesday).

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.”

Jo Whitfield, Food CEO of 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.

“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.”

Readers' comments (4)

  • If the members are sensible this time,this is a good option but given their track record you never know.This should leave Costcutter to make make their announcement very very soon as to their new distribution plans.Interesting few weeks ahead.

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  • So you swop your shares and a vote for what? A £1 share in the Co-op, the same as Mrs McGinty and millions of others who have no interest at all in your future.

    Oh, but you get the opportunity to apply for a Co-op franchise. Which means exactly what? Diddly squat!

    A like-minded business? How? What? Explanation required.

    If you could take the money and run this deal might make some sense on an individual basis but deferred payments and additional rebates which rely on the future prospects of the Co-op? Jam tomorrow!

    What happened to the independent pharmacy sector after the sale of mutually owned Unichem? What happened to M&S Toiletries under Co-op ownership? Do you really believe the long-term decline of the Co-op movement can be reversed?






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  • I just hope, like most observers that NISA members see the light and make the right decision. The most important line to watch is that the Coop will also accommodate a net debt of £105m! They (NISA members) are not exactly flush with money to invest nor have they got suitors knocking on their doors to buy a mutual which has only just managed to turn around. Scale is also important as you can no longer survive in view of where the market is going. At the same time the mults are also getting aggressive in their convenience offer.

    One of the biggest challenge ironically for the Coop will be, how you convince the membership in a mutual which holds dis-proportionate power in decision making for the company’s future. It’s a bit like running a shop by committees! Everyone seems to have the answer to its survival.

    Arjan Mehr Londis Bracknell

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  • Nisa is not what it used to be just as the market is not what it used to be - the co-op offer, offers change and a chance of range improvement as well as 7 x turnover. Nisa can stay as is and try its hardest to become what it once was, but it will stay a small player with an inferior range and dwindle away into becoming a supplier with high overheads - members will cherry pick and then leave to the bigger groups with better ranges.
    Whats the worst that can happen? Coop doesn't perform and the members leave - leaving coop with debt. Most members will recoup their initial share investment (dependent on how many shares they own) As always.....investments (shares) can go up and down, this should have been understood when the shares were purchased...its a risk, which I think is worth taking.

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