Morrisons and EG make final bid for McCall

Wm Morrison has launched McColl’s final bailout bid and urged gas station operator EG Group to improve its proposal to buy a struggling UK convenience store chain. Out of control..

Just hours before the court was expected to formally appoint an administrator, supermarket operator Morrisons submitted an improved proposal to beat McCall’s lenders who rejected the previous proposal.

EG, whose owner also manages the grocery chain Asda, has offered to undertake funding for McColl’s pension scheme. The move seeks to ease the fear of using controversial bankruptcy proceedings to break promises with 2,000 retirement plan members.

Sunday’s offer marks the end of a two-way battle for McCall, and people close to the process expect Morrisons and EG to submit the best final bid before a decision is made on Monday. was doing.

McColl’s operates more than 1,200 convenience stores, including more than 200 stores under the Morrisons Daily brand. Any sale may protect some of the 16,000 jobs that would be at risk if the company collapsed. Convenience store groups have a debt of approximately £ 145m.

Ministers are watching the progress carefully, and senior Conservative officials say the priority is to protect employment and livelihoods. But one senior government official said it wasn’t particularly appealing to choose between “over-leveraged EG and US private equity.” Morrisons is owned by US acquisition groups Clayton, Dubilier & Rice.

In its latest proposal, Bradford-based Morrisons still aims to keep McCall out of control. But, importantly, in line with EG’s bid elements, which were considered significant on Friday, we proposed to immediately repay the full amount to McCall’s lenders rather than rolling the debt into the integrated group. bottom.

Morrisons and EG declined to comment. The Morrisons opposition bid was first reported by Sky News.

McColl’s Trouble provides the Blackburn-based EG Group with a rare opportunity to expand its UK grocery network. However, McColl’s existing commercial ties with Morrisons favor EG’s purchase of the group out of control.

EG called for a quick deal, according to one who knew the matter, after McCall rejected Morrisons’ offer on Friday due to opposition from creditors.

However, waiting for McCall’s manager to be appointed by the court gave Morrisons time to make a counter-offer.

The Group’s broader plans and its pension plan are decisive in determining which proposal predominates, as both bidders effectively offer the same financial terms as McCall’s lenders. It can be a factor.

Morrisons on Friday said the decision to put McCall in power was “disappointing, damaging and unnecessary consequences” for “thousands of hard-working people and pensioners.”

Prior to Sunday, EG did not reveal how it would approach McCall’s retirement fund.

They say that “breaking the link” between the two McCall-sponsored pension schemes is a “serious breach of pension promises” made by “prepack” management to staff who have been faithfully engaged in the business for many years. “.

The “prepack” arrangement can be controversial as it allows pension fund debt to be passed on to the industry’s lifeboat, the pension protection fund. Members usually face pension reductions, but the business continues under new ownership.

The PPF on Sunday said it was “inappropriate to comment” on McCall’s situation.

“But in potential prepack situations, we always work closely with pension regulators and company managers to ensure best results for institutional members, PPFs, and payers of levies,” the fund said. I am saying.

Morrisons and EG make final bid for McCall

Source link Morrisons and EG make final bid for McCall

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