Morrisons picks up McColl’s in pre-pack deal

Morrisons has won the race to buy McColl’s after agreeing to pay its lenders £160m upfront. Morrisons’ final offer for the 1,160-convenience store chain was selected ahead of an improved bid made over the weekend by EG Group, the petrol forecourts operator owned by the Issa Brothers, who also own Asda. It appears Morrisons has agreed to waive the money it is owed by the chain, thought to be around £150m. PwC was formally appointed as administrator on Monday and sold the business as part of a pre-pack administration, a fast-track insolvency process. Morrisons, McColl’s largest supplier and creditor, had an exposure of about £130m to the company it has bought, mostly in stock. David Potts, chief executive at Morrisons, 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.” Morrisons already has a wholesale agreement with the chain. The majority of McColl’s stores trade under its own brand, but 270 operate as Morrisons Daily concessions as part of a joint venture. The Times (£) The FT (£) The Guardian