Morrisons launches bid to save McColl’s
Morrisons has launched a last minute bid to save the convenience store chain McColl’s from administration
The supermarket giant announced the bid this morning after McColl’s warned that unless it secured more funding then administration was increasingly likely.
In statement released on Thursday McColl’s said: ‘Whilst no decision has yet been made, McColl’s confirms that unless an alternative solution can be agreed in the short term, it is increasingly likely that the group would be placed into administration with the objective of achieving a sale of the group to a third-party purchaser and securing the interests of creditors and employees.
‘Even if a successful outcome is achieved, it is likely to result in little or no value being attributed to the group’s ordinary shares.’
Morrisons is already in a partnership with McColl’s with the business operating more than 250 Morrisons Daily convenience stores and their bid has been reported to include taking on McColl’s pension commitments, its £170m debt and the ‘vast majority’ of McColl’s 1,100 stores and 16,000 jobs would be retained after a takeover.
Earlier this week, McColl’s warned that its shares would be suspended at the end of May because it was unable to meet a statutory deadline for filing its annual results, adding that the delay ‘reflected the need for a conclusion to discussions with key stakeholders around a potential financing solution for the business, in order to finalise the company’s FY21 audited financial statements’.
BDO is the group’s current auditor taking over from Deloitte in 2018. PwC is currently the adviser to McColl’s lenders and it is expected that the Big Four firm would take on the role of the administrator if the company’s collapse cannot be averted.
McColl’s, which is one of the UK’s biggest convenience store chains, was incorporated in 1973 as a vending machine operator and went on to buy several convenience store chains before focusing solely on retail in 2000.
If McColl’s is forced into administration, it would be the biggest insolvency in the UK retail sector by the size of the workforce since the collapse of Edinburgh Woollen Mill Group in 2020.
Morrisons and McColl’s have declined to comment at this time.
Story wrote by Ruby Flanagan.