Co-op bids to make Nisa fit

THE Co-op Group is closing in on a deal to more than double its food store presence after the board of convenience chain Nisa Retail recommended a £137.5million takeover.

Member-owned Nisa, which supports nearly 1,200 retailers and more than 3,200 outlets around the UK, will remain a standalone business and brand.

The Co-op, which has about 2,800 food stores, will pay a total of £143million including deal costs, with Nisa shareholders receiving an equal initial payment, a deferred payment over three years and additional rebates payable over four years. It will also take on Nisa’s £105million debt.

Nisa had previously been in exclusive talks with Sainsbury’s, but the supermarket giant lost its pole position amid competition concerns as it awaits a probe into Tesco’s proposed £3.7billion takeover of wholesaler Booker Group.

The Co-op, which is owned by more than 4.5 million members, said a deal, which is expected to be voted on my Nisa members next month, will enable them to “retain their independence of operating their stores how they want” while being able to source products from the Co-op and apply to become a Co-op franchise.

It will boost the Co-op’s presence in the wholesale convenience sector, enhance its scale and buying power, and extend its reach into new communities.

Jo Whitfield, pictured, chief executive of the Co-op’s food business, said: “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 customers and creating real value for them and their communities.

“If our offer is accepted and approved by the Competition and Markets Authority, we can deliver a win-win for two member-led, communitybased organisations.”

Nisa posted annual pre-tax profit of £2.8million last year on revenue of £1.25billion.

Its chairman, Peter Hartley, said it had made “significant strides” in recent years, but the Co-op offered “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”.