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Morrisons wins out after weekend battle with EG Group for control of McColl’s

Linda Stewart — Mon, 09 May 2022 13:09:29 +0000

Morrisons has triumphed in the battle to gain control of McColl’s Retail Group, one of Britain’s biggest convenience store chains, after a last-gasp offer to buy out its syndicate of bank lenders.

The supermarket giant saw off last-minute competition from filling station operator EG Group with an offer that will see McColl’s stores and workforce preserved in their entirety.

The deal will be structured as a pre-pack administration, meaning Morrisons will buy McColl’s immediately after it enters insolvency proceedings overseen by PricewaterhouseCoopers (PwC).

On Friday, Morrisons said it believed there was no reason for the corner shop empire to be declared insolvent, but the pace of events over the weekend, with McColl’s teetering on the brink of collapse, left PwC with no time to finalise a solvent transaction, Sky News reports.

Morrisons’ commitments to the future of McColl’s include retaining all 1,100 stores and 16,000 workers, as well as honouring all of its outstanding pension obligations, an insider said.

On Friday evening, EG Group appeared to have sewn up a takeover of McColl’s, although its stance towards the company’s two pension schemes had begun to draw political scrutiny.

McColl’s lenders rejected a solvent rescue offer from Morrisons on Friday that would have involved them rolling over more than £100m of debt into the supermarket chain, but being repaid in full as the loans expired.

The lenders, which include Barclays, HSBC and state-backed NatWest Group, were seeking immediate repayment of their loans, initially leading them to favour EG Group

Confirmation of administration proceedings will make it the largest insolvency in the UK retail sector by size of workforce since the collapse of Edinburgh Woollen Mill Group in 2020.

Since then, both Debenhams, which employed about 12,000 people, and Sir Philip Green’s Arcadia Group, which had a workforce numbering roughly 13,000, have also gone bust, becoming casualties of changing retail shopping habits and the pandemic.

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EG Group to create 32,000 jobs through foodservice expansion

Linda Stewart — Fri, 22 Apr 2022 09:02:08 +0000

Asda owners EG Group plans to create 32,000 jobs through foodservice expansion over the next five years.

The petrol station and food business run by Asda’s Issa brothers has revealed the expansion would include 22,700 new roles in the UK alone.

A large portion of jobs would be for the company’s bakery chain Cooplands and fast food brand Leon, which were both acquired in 2021 across EG’s forecourt network.

EG has also planned more Asda food service concessions within its supermarket stores. New jobs are also set to fuel third-party brand partners, such as Starbucks, KFC and drive-thru sites.

The remainder of the new jobs would come from “organic growth” across nine other markets, including Ireland, France, Italy, Germany, Belgium, the Netherlands, Luxembourg, Australia and the United States.

As the hospitality industry is currently experiencing record vacancy levels, the company has offered an “attractive package” to new staff members.

“We are proud to be a business founded in Britain that invests in job creation worldwide, while focusing heavily on the training and development of colleagues,” the Issa brothers said.

“EG has a strong track record of providing colleagues with long-term opportunities to progress their career at all levels ‒ and we are passionate about continuing this.”

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Issa brothers are frontrunners in £7bn race to buy Boots

Linda Stewart — Tue, 22 Mar 2022 09:38:56 +0000

EG Group owners, the Issa brothers, are frontrunners in a £7bn bidding war to acquire high street stalwart Boots.

Billionaires Mohsin and Zuber Issa, who own Asda and the EG Group, are top the list to take over the high street health and beauty stores.

If successful, they would be adding a further 2,200 stores in high streets and shopping centres to their expansive business catalogue.

The would-be buyers will be meeting with Boots bosses this week about any sale.

Boots, which employs 50,000 people, is currently owned by US-based company Walgreens Boots Alliance, which unveiled a ‘strategic review’ of the pharmacy chain in January.

The brothers, who also own Cooplands Bakery and have been attempting to acquire Caffé Nero, are reportedly competing against a host of private equity firms including TDR Capital, with whom they purchased Asda from Walmart in a £6.8 billion deal.

Apollo – which recently saw its bid to takeover supermarket Morrisons snubbed – and Sycamore Partners, who own Staples, are also in the running to buy 172-year-old company, founded in Nottingham by John Boot.

Previously interested bidders Bain Capital and CVC Capital Partners have already dropped out.

Currently owned by American company Walgreens, the sale of the chain of chemists led shops is reportedly going ahead in an auction process by Goldman Sachs.

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Motor Fuel Group owners eyeing £5bn sale of petrol forecourts giant

Linda Stewart — Wed, 19 Jan 2022 10:42:13 +0000

UK independent petrol forecourt operating giant Motor Fuel Group is kicking off plans for a sale that could value it at about £5bn.

MFG, which is owned by the private equity firm Clayton Dubilier & Rice (CD&R), has invited investment banks to pitch for a mandate to sell the company, which trades from roughly 900 sites across the UK, according to Sky News.

MFG said recently that it would spend £50m this year on installing 350 rapid vehicle chargers across its estate.

The company has grown substantially since CD&R bought it in 2015 from Patron Capital Partners in a deal worth about £500m.

Three years later, it paid £1.2bn to add market leader MRH, creating a group operating under fuel brands such as BP, Esso, Shell and Texaco.

Profits are understood to have risen approximately tenfold since CD&R’s original acquisition of MFG.

The company has invested heavily in its convenience retailing proposition, featuring the likes of Costa Coffee, Greggs and Subway at many of its sites.

The CD&R-owned company competes with supermarket-owned fuel chains, as well as the likes of EG Group, which is owned by Mohsin and Zuber Issa in conjunction with TDR Capital.

MFG’s increased focus on electrification may appeal to infrastructure investors who could seek to partner with each other to bid for the company, according to banking sources.

A deal could also attract interest from oil companies attempting to harness the global energy transition, they added.

MFG is run by William Bannister, who acquired the business in 2011 through a management buy-in, while it is chaired by Alasdair Locke, a serial entrepreneur in the energy industry.

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