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Bloomberg
Wm Morrison Supermarkets Plc is poised to take control of insolvent UK convenience-store chain McColl’s Retail Group Plc after a bidding war with gas station and convenience empire EG Group, according to people familiar with the matter.
Morrison is purchasing McColl’s through a prepackaged administration, a form of UK insolvency proceeding. The plan is yet to be confirmed by administrator PricewaterhouseCoopers LLP. Morrison and EG Group declined to comment.
Morrison is the main wholesale supplier to McColl’s and had been locked in financing talks with the company and its banks for months. Last week McColl’s appointed administrators after its banks failed to come to an agreement. EG Group, whose owners also control supermarket chain Asda, put forward a rival offer.
News that Morrison has won the battle for McColl’s was first reported by Sky News.
McColl’s has more than 1,200 stores and employs 16,000 people. Morrison’s proposal would have avoided the company
entering administration and keeps the vast majority of jobs and stores safe as well as protecting pensioners and lenders, a spokesperson for Morrison said. The retail chain has two pension plans with about 2,000 members.
McColl’s insolvency is the biggest collapse in the UK retail sector since the 2020 failure of Arcadia Group, Philip Green’s fashion empire that owned brands including Topshop and Dorothy Perkins. British retailers have battled pandemic restrictions and a global supply chain crisis during the past two years, and are now grappling soaring inflation.
Morrison, owned by the US private equity firm Clayton, Dubilier & Rice, has previously told its shareholders it could face a hit of up to 130 million pounds ($160 million) from the collapse of McColl’s, and it’s owed 10 million pounds under its wholesale contract.
EG Group is owned by the acquisitive entrepreneur brothers Mohsin and Zuber Issa and private equity firm TDR Capital. The investors also own Leon and the Cooplans bakery chain.