Nisa members are preparing to cast their votes on the Co-op’s proposed takeover of the mutually-owned food distributor.
The decisive vote on the distributor’s future will take place at a meeting next Monday, 13 November. Members can vote in person or via a proxy, with the deadline for registering for the latter method at 11am tomorrow (Thursday).
In order to pass, more than 50% of shareholders voting have to be in favour, and the total ‘yes’ vote must represent at least 75% of the shareholding. If the proposal is accepted, a second vote will be held to authorise the takeover and to change Nisa’s articles of association accordingly, and this also requires 75% of the volume of shares in favour in order to pass.
The Co-operative Group and the Nisa board are making one final push to encourage members to accept the bid, which offers 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. In addition, members will have access to Co-op own label products and the option of operating stores under a Co-op franchise scheme.
A Nisa spokesperson said: “Many convenience retailers are struggling against significant headwinds from the minimum wage, dark tobacco, Brexit, rising rents, and the entrance of larger competition into convenience. There is growing demand for a tie-up that provides greater buying power, an enhanced range, better fresh and chilled, and lower cost prices. This is even more urgent now McColls has decided to leave Nisa.
“Co-op is offering to pay Nisa shareholders £1,654 per share, and this represents an attractive multiple of Nisa’s 2016 EBITDA. Added to which Co-op brings seven times the buying power of Nisa, and is offering Nisa members the flexibility to trade as they wish and keep the Nisa name.”
Jo Whitfield, ceo Co-op Food, added: “We’ve been greatly encouraged by the level of engagement and feedback we’ve had from Nisa members ahead of the vote. We believe our offer is compelling for members and provides the opportunity for them to grow and develop their businesses further, through the increased level of buying and product quality we bring.
“The Co-op’s roots are firmly centred in the hearts of local communities and this deal if successful will strengthen community retailing across the length and breadth of the UK.
“We would therefore encourage all members to vote and have your voice in how the future of your business is shaped.”