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.”