The Co-op Group closes in on Nisa with £143mn takeover bid

The Co-op Group has entered exclusive talks to acquire convenience store chain Nisa for GBP£143mn, as major supermarket chains try to extend their reach into the convenience store sector.

The retailer has now reportedly replaced Sainsbury’s, who had also been considering bidding, as the frontrunner to acquire Nisa.

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The process was kicked off in the wake of Tesco’s proposed GBP£3.7bn Brooker takeover, which sent shockwaves through the food retail industry. This has prompted major supermarkets to seek expansion into the convenience and wholesale sectors.

The Tesco deal is currently being investigated by competition regulators in a move which is widely reported to have led Sainsbury’s to pause its own negotiations with NIsa.

The proposed offer for the Nisa acquisition includes GBP£137.5mn for the full shareholding of the company plus associated deals costs of GBP£5.5mn, coming to a total cost of GBP£143mn.

The Co-op will also take on Nisa’s GBP£105mn debt and their product range will be open to Nisa’s independent shopkeeper members.

Jo Whitfield, chief executive of food at 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.”

Peter Hartley, Chairman of Nisa, added: “The Board was unanimous in its decision to recommend the Co-op bid. 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.”

Nisa said it had granted the Co-op a period of exclusive due diligence in the hope that a deal could progress “as quickly as possible”.

Any bid would need to be approved by Nisa’s 1,3000 shopkeeper members and, if successful, Nisa’s members would still run the shops whilst the Co-op would take over the buying and distributing of groceries sold in those stores.