Co-op makes £137.5M offer for Nisa

The Co-op Group has made an offer to buy member-owned symbol group Nisa for £137.5 million, it emerged on Tuesday.

Nisa said its board is unanimous in recommending its shareholders – largely made up of independent retailers – accept the deal, describing it as a “compelling all-round proposition”.

It is expected to be put to a vote by Nisa members in November.

An acquisition of Nisa has been in offing for a number of months, with Sainsbury’s among a number of potential buyers.

Former CEO Nick Read had hinted at the possibility of a deal at the beginning of this year.

He stepped down in early October, with non-executive board member Arnu Misra appointed interim CEO on Monday.

The offer comes just days after Nisa revealed total sales of £728m for the first half of 2017, an increase of 12.4% on last year.

The acquisition includes 100% of the shares in Nisa, 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.

Nisa’s board said the offer represented “significant immediate and long-term value” for members, access to greater scale and the Co-op range including the Co-op own label products.

Importantly, the deal would also allow Nisa members to retain their independence to operate stores how they want.

If the deal is accepted, Nisa shareholders will receive an equal initial payment, a deferred share payment payable over three years, as well as additional rebates payable over four years.

Co-op would also take on the existing Nisa debt of £105m.

Commenting, 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, added: “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.”

The terms of the acquisition, which remain conditional on the approval of Nisa members and CMA clearance, is being explained to members on Tuesday.

Co-op and Nisa said their teams would be holding regional events in the coming weeks to explain the offer to members and answer any questions they may have.