Supermarket group Morrisons has won a battle against the owners of rival Asda to buy collapsed convenience store chain McColl’s.
In a deal structured through a so called pre-pack administration, Morrisons, which has a wholesale supply deal with McColl’s, will take on all its 1,160 stores, including 270 Morrisons Daily format stores.
Morrisons will also take on all of McColl’s workforce of 16,000 and its two pension schemes, which have over 2,000 members.
It said McColl’s‘ secured lenders and preferential creditors would be paid in full with a distribution also expected to unsecured creditors.
McColl’s went into administration with debt of just under 170 million pounds.
EG Group, the petrol station and food retail business owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, was set to seize control of McColls after its lenders rejected a rescue deal from Morrisons on Friday. The brothers and TDR also own Asda.
However, over the weekend, Morrisons came back with a fresh proposal.
“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,” said Morrisons CEO David Potts.
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