Nisa’s Board has unanimously recommended that its Members accept the Co-op’s offer of up to £137.5m for 100% of shares in the symbol group.
Associated deal costs of up to £5.5m gives the Co-op a final cost of up to £143m for the acquisition. It would also take on the existing Nisa debt of £105m.
The offer is expected to be put to Members to vote upon in November. The acquisition is also subject to clearance from the CMA.
If the deal goes ahead, 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.
The offer gives Nisa members access to greater scale, access to the Co-op range, retention of their independence of operating their stores how they want, while also remaining part of a member-owned organisation.
Conversely, the acquisition would strengthen the Co-op’s presence in the wholesale convenience sector, in turn enhancing its scale and buying power.
The Co-op plans to retain Nisa as a standalone business and brand. Its ambition is to attract new members to the combined business.
Co-op and Nisa teams will be out on the road at regional events in the coming weeks to explain the offer to members and answer any questions.
Peter Hartley, Chairman of Nisa, said: “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: “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.”
Angus Grierson, Managing Director of LGB Corporate Finance, commented: “The Co-op’s acquisition of Nisa will extend its geographic reach across the country, enable it to reduce its cost base and improve sourcing for the enlarged group. The deal is likely to be a good fit as its mutual status will appeal to Nisa’s 1,400 shopkeeper members who have previously demonstrated reluctance to a potential loss of their independence. This acquisition is a continuation of the fundamental changes we have seen in the grocery marketplace over the past year and we expect more of this as the big grocery retailers compete to survive in volatile times, with food price inflation putting pressure on margins and increased competition from online retail giants.”