Morrisons and EG Group launch final bids for McColl’s
Morrisons and EG Group have both tabled final offers to secure a rescue deal for collapsed retailer McColl’s.
The convenience chain, which has outlets in Lynn, Fakenham and Downham, fell into administration on Friday, plunging the future of its 1,100 shops and 16,000 staff into doubt.
Forecourt giant EG – whose owners also run supermarket giant Asda – had been favourites to complete a rescue deal for McColl’s.
However, it is understood that both EG and Morrisons both tabled late improved offers prior to the administrators’ Sunday 6pm deadline for offers.
It is understood that EG has bowed to pressure to look after McColl’s pension liabilities, in a move that means that its 2,000 members will avoid a cut of up to 20% to their promised pensions over their lifetimes.
Trustees for the McColl’s pension schemes have called on the Business Secretary Kwasi Kwarteng to do whatever he can to ensure pension scheme members are well protected.
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.
It is believed that Morrisons has now said it will also repay the lenders in cash.
McColl’s filed a notice for administration on Friday and is now expected to formally enter administration today before a pre-pack deal is completed.
It is understood that EG group has proposed to retain the retailer’s stores and staff, promising to increase the lowest rate of McColl’s staff to £10.05.
However, it is predicted that any sale to EG could result in short term disruption to supply for McColl’s stores.
Morrisons is currently McColl’s wholesale supply partner and is expected to immediately terminate its deal with the convenience chain if their takeover move is unsuccessful.