The Co-op has offered to buy 100% of Nisa shares for up to £137.5m
THE Co-op Group has made an offer to purchase Nisa, which has been unanimously recommended to shareholders by the symbol group’s board.
The board of Nisa Retail limited has recommended an offer of up to £137.5m from The Co-op which would see the group acquire a business and brand which has around 1,190 members and services 3,200 stores.
Terms of The Co-op’s proposed acquisition of Nisa will be set out to members today, ahead of a members vote on the offer in November.
The Co-op’s offer would see the firm buy 100% of the shares in Nisa for up to £137.5m, a valuation of around £2,300 per share, plus payment of associated deal costs of up to £5.5m resulting in a total payment by The Co-op Group of up to £143m.
Should the deal go ahead, Nisa shareholders will receive an equal initial payment followed by a deferred share payment payable over three years as well as additional rebates payable over four years. Nisa members are able to own between one and 250 shares out of almost 60,000.
Ahead of the vote in November, teams from the Co-op and Nisa will host a number of regional events to explain the offer to members and answer questions.
Benefits of the deal expected to be highlighted by Nisa and The Co-op include the ability to enhance Nisa’s existing product range, particularly within fresh and chilled; the continuation of various aspects of Nisa members’ independence to fully source the range that best suits their store; the opportunity to apply to become a Co-op franchise.
Commenting on the offer, Peter Hartley, chairman of Nisa said: “The Board was unanimous in its decision to recommend the Co-op offer. 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.”
Jo Whitfield, Food CEO of 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.
“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.
“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.
“If our offer is accepted by Nisa members and approved by the CMA, we can deliver a win-win for two member-led, community-focused organisations, and in the process create a distinctive footprint within the growing UK convenience retail sector.
“We are looking forward to meeting Nisa members at the roadshow events in the coming weeks, listening to their views and answering their questions.”
Should Nisa retailers accept The Co-op’s offer, the deal will become subject to Competition and Markets Authority clearance. The CMA is currently investigating Tesco’s proposed purchase of Booker, with the watchdog raising concerns around the impact such a deal may have on competition in the retail sector.