Morrisons wins battle to take over McColl’s shops

MORRISONS has beaten EG Group in a takeover battle for collapsed retailer McColl’s.

Bosses said all McColl’s staff will keep their jobs as the firm’s shops transfer to the new owner, while Morrisons will take over the company’s two pension schemes.

The convenience chain fell into administration on Friday, plunging the future of its 1,160 shops and 16,000 staff into doubt.

It came after the UK’s fourth-largest supermarket chain and forecourt giant EG Group both tabled final offers on Sunday to secure a rescue deal for McColl’s.

EG – whose owners also run supermarket giant Asda – had initially been favourites to complete a rescue deal for McColl’s.

Morrisons’ early approaches had reportedly been rejected by lenders who preferred EG’s offer to instantly repay more than £160 million in debts from McColl’s.

However, it is understood that Morrisons’ successful move will also repay the lenders in cash.

In a statement after the deal was announced, it said that “the secured lenders and preferential creditors will be paid in full with a distribution also expected to unsecured creditors”.

Morrisons had also originally proposed to only save the “vast majority” of job and stores, but improved this offer during the bidding process.

“All McColl’s colleagues will be transferred with the McColl’s business to Morrisons,” the supermarket said on Monday.

Morrisons chief executive David Potts said: “Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders. This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners.

“We all look forward to welcoming many new colleagues into the Morrisons business and to building on the proven strength of the Morrisons Daily format.”

McColl’s filed a notice to appoint administrators from PwC on Friday and formally entered administration yesterday.

Swindon-based Smiths News serves around 600 McColl’s stores. It said McColl’s represented a “bad debt risk” to the company of £6-7m, with £1.2m of that overdue.

“The company is closely monitoring the current situation and considering options for reducing the current risk, including the return of unsold stock,” Smiths News said in a statement.

Smiths News, which supplies 24,000 retailers across England and Wales, said a further update would be announced in due course.

McColl’s is among a long list of high street chains that have fallen into financial difficulty during the pandemic. A number of big-name brands have already gone bust this year, including TM Lewin and Sofa Workshop.