Nisa grants Co-op exclusive period for potential offer

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Nisa Retail has revealed that it is in exclusive talks with the Co-operative Group about a possible offer for the Scunthorpe-based distributor.

In a letter to members, Nisa chairman Peter Hartley confirmed that the two parties had held “pragmatic and constructive” talks in recent weeks, following the Co-op’s reaffirmation of interest in making a bid for Nisa, and that the Board has granted the Society a period of exclusive due diligence starting from today (August 30).

“During these discussions the Co-op has confirmed, subject to further due diligence, its intention to progress matters as quickly as possible, in the hope that a transaction can be finalised,” Hartley continued. “The Co-op is willing to incur costs on its own account to do this.”

The group recently ended a similar period of exclusivity with Sainsbury’s, as the supermarket chain wanted to wait for the outcome of the competition authority’s ruling on the proposed Tesco-Booker merger before making a bid. While an offer from the Co-op is not guaranteed, Hartley added that “it is anticipated that the Co-op could be in a position to make a final offer to the Members for (your) consideration”.

Any offer would be subject to approval by member shareholders of Nisa. Hartley added: “As you are all aware our business and the convenience sector continue to evolve at pace and the Board of Nisa will continue to review serious queries and offers which emerge (within the constraints of any agreed exclusivity period) and which it believes are in the best long-term interest of the Members.”

Readers' comments (6)

  • Interesting to see how the stakeholders of NISA take to being possibly taken over by a Labour supporting company given their commitment to higher wages and the end of zero hrs contracts that most badly run shops rely on

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  • The Co-op's decline has been almost as bad as that of the independent sector. It has raised cash by selling the investment side of CIS, pharmacies and farms. It has withdrawn from manufacturing, non-food retail sectors, and large grocery stores. It has pretty much written off its bank. Recently it sold off a number of smaller stores to McColls. If it had wanted to enter the wholesale sector it could have negotiated a supply deal as part of the McColls deal. On a much smaller scale Scotmid Co-op entered the wholesale sector by buying M&S Toiletries and that was, to put it politely, a failure. The consumer co-op model is very different to the business partnership model of Nisa.

    Given all the above, can anybody really believe that Co-op Group ownership of Nisa promises any benefit to Nisa members or the wider independent sector?

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  • Both the Co-op and Nisa are mutually owned by their members/customers so not a bad fit in that respect but I'm really not sure what the Co-op's strategy going forward is now.

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  • Daniel, Make an Offer to buy the best independent outlets and enlarge their estate, and let the others carry on as they are now to the vagaries of the changing and competitive convenience market.

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  • Fred, I'm sure that's one of the main reasons Tesco wants to buy Booker. With the data they'll have access to, they'll easily be able to find out which independent convenience stores are successful/profitable and then either buy them out or simply open a Tesco Express or One Stop in the vicinity. Who knows, Tesco may even start operating some of their stores under the Londis, Budgens, Premier Stores brands to give the public the impression they have choice and are shopping at a local indy shop when in reality they are shopping in a store owned and operated directly by Tesco.

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  • Daniel, yes both are mutually owned but would you want to swop your share(s) in Nisa, a business whose sole purpose is to provide for the independent grocery sector, for a single share in the mess that is the Co-op group? I like millions of others own a £1 share. I doubt that there are many Nisa retailers who read my comments on here would want me to influence the operation of their mutually-owned supplier. And think of the millions of Co-op members that understand the business less than they understand rocket surgery.

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