Morrisons poised to takeover McColl's
UK supermarket Morrisons is poised to take control of McColl’s in an eleventh hour attempt for the crisis-hit convenience store chain, beating the billionaire owners of Asda.
Morrisons, which is owned by US private equity firm Clayton, Dubilier & Rice, has seen off competition from petrol station operator EG Group after a dramatic bidding war over the weekend.
The deal, which will be structured as a pre-pack administration, will ensure all of McColl’s shops and workforce is preserved, Sky News first reported.
Morrisons was seen as a frontrunner to take control of McColl’s last week before lenders rejected a rescue pact that would have seen around £100m ($124m) of debt rolled into the supermarket chain.
EG Group then launched a rival bid and another improved deal to cover funding for the company’s pension scheme.
The move prompted Morrisons to table a second offer on Sunday night that included a pledge to repay lenders in full immediately, a key sticking point in its original proposal.
Read more: McColl's collapses into administration with 16,000 jobs at risk
On Friday, the embattled convenience store collapsed into administration, putting 16,000 jobs at risk.
McColl’s, which already has close commercial ties with Morrisons, operates over 1,200 corner stores and newsagents across the country under the McColl’s, RS McColl and Morrisons Daily brands.
It has been in talks with lenders about a deal after it was hit by supply chain issues and rising inflation.
The London-listed firm has a debt pile of around £170m ($210m), and its shares on the London Stock Exchange (LSEG.L) were suspended on Friday.
McColl’s was valued at about £200m when it first floated in 2014, but has struggled to compete with larger competitors such as Tesco (TSCO.L), J Sainsbury (SBRY.L) and Co-op.
Morrisons had not replied to a request for comment from Yahoo Finance UK at the time of writing.