Co-op has made a formal offer to buy convenience chain Nisa for £137.5m

 
Alys Key
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Co-op has reached an agreed offer to pick up Nisa (Source: Getty)

The Co-operative has offered to buy convenience chain Nisa for £137.5m.

Nisa released a statement this morning saying that its board had unanimously recommended the offer to its members.

The offer includes £137.5m for the full shareholding of the company plus associated deal costs of £5.5m, totting up to a total cost to Co-op of £143m.Co-op will also take on Nisa's £105m debt.

Co-op's product range will also be open to Nisa's independent shopkeeper members. Nisa store operators will also have the option to apply to become a full Co-op franchisee.

The deal will now go to a vote of Nisa's shopkeeper members in November. It is thought that some members who had objected to a possible Sainsbury's takeover will be more sympathetic to being owned by Co-op, due to the group's member-owned status.

"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," said Nisa chairman Peter Hartley. "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.”

Nisa restarted talks with the Co-op after Sainsbury's paused talks on its own takeover bid with the convenience chain.

The whole process was kicked off in the wake of Tesco's proposed £3.7bn Booker takeover, which has sent shockwaves through the grocery industry and prompted supermarkets to seek expansion in the convenience and wholesale sectors.

“Over the past three years, Co-op Food has been completely transformed through a convenience-led focus on delivering great value products for our members and creating real value for them and their communities," said Jo Whitfield, Food CEO of Co-op.

“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."

Nisa's takeover saga

11 June: Nisa drafts in bankers as it toys with a surprise sale as the industry reels from Tesco's proposed takeover of Booker.

18 June: Nisa's board favours a bid from Sainsbury's over Co-op, leading to a small group of activist members writing a letter over concerns the group could be demutualised.

1 August: Nisa loses McColls, one of its biggest customers, after Morrisons unveils a new tie-up with the convenience store chain.

14 August: Sainsbury's allows its period of exclusivity with Nisa to end without making an offer, leading Nisa to get back around the negotiation table with former suitor the Co-op.

30 August: Co-op enters its own period of exclusivity with Nisa and Sainsbury's shares rise as investors express relief that the supermarket it less likely to buy the organisation.

30 September: Nisa chief executive Nick Read announces his resignation

6 October: Nisa appoints an interim boss

10 October: The Nisa board unanimously recommends a £137.5m offer from the Co-op to its members, who will vote in November.

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