Nisa Board Recommends Co-op Group Offer To Nisa Members

10 October 2017

Co-op Offers Nisa Members Significant Value, A Compelling All-Round Proposition and The Opportunity To Retain Member-Led Ownership

The Board of Nisa Retail Limited, the member-owned retail and wholesaling group, has unanimously recommended to its shareholders an offer of up to £137.5m from The Co-op Group.

The offer, if successful, would bring significant immediate and long-term value for Nisa members, access to greater scale, access to the award-winning Co-op range - including the Co-op own label proposition, retention of their independence of operating their stores how they want, while also enabling them to remain part of a member-owned organisation within the growing UK convenience retail sector.

The Co-op Group’s offer to buy 100% of the shares in Nisa for up to £137.5m, plus the payment of associated deal costs of up to £5.5m, results in a total payment by the Co-op Group of up to £143m.
Nisa shareholders will receive an equal initial payment, a deferred share payment payable over 3 years, as well as additional rebates payable over 4 years.

Co-op would also take on the existing Nisa debt of £105m as well as providing additional benefits which would include: The opportunity to source products from the Co-op, the UK’s fastest growing convenience retailer, which recently reported its fourteenth consecutive quarter of like-for-like sales growth and has a proven heritage and track record in wholesaling.

• The ability to significantly enhance the existing product offer, especially within the fresh and chilled categories, with Co-op’s award-winning own-brand range.
• The ability to source a wide range of products from a provider with a history of supporting a varied portfolio of stores, from small convenience stores right up to 35,000sq ft.
• The opportunity to partner with a like-minded business which is member-owned, community-focused and ethically-guided.
• The continuation of key aspects of Nisa members’ independence to fully source the range that best suits their stores, and to operate those stores how they want.
• The possibility to be part of regular senior management engagement meetings, held at a local level, and the ability to continue to have a voice on how Nisa is run.
• The opportunity to apply to become a Co-op franchise, benefitting from the Co-op brand and additional services.

The acquisition of Nisa would also bring clear benefits for the Co-op, allowing it to strengthen its presence in the wholesale convenience sector, in turn enhancing its scale and buying power for the benefit of all customers, while extending the reach of the Co-op brand into new communities. It would also provide the opportunity to support like-minded independent retailers, with a clear sense of commitment to serving and supporting their local communities.

Nisa members would see existing service levels maintained with a view to improving these over time, as the Co-op plans to retain Nisa as a standalone business and brand, which has around 1,190 members and services 3,200 stores. The ambition is to attract new members to the combined business.

The terms of the acquisition, which remain conditional on the approval of Nisa members and CMA clearance, will be explained to members today. The 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 they may have. A vote of the membership will be held in early November.

Commenting, Peter Hartley, Chairman of Nisa, said;

“The Board was unanimous in its decision to recommend the Co-op offer. 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.”

Commenting, Jo Whitfield, Food CEO of The Co-op, said;

“This acquisition provides the opportunity to create an even greater and more compelling member-led presence within the UK convenience sector. 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.

“Over the past three years, Co-op Food has been completely transformed through a convenience-led focus on delivering great value products for our members and creating real value for them and their communities.

“Co-op and Nisa have achieved so much on their own to support local communities, but together I believe we can go from strength to strength.

“If our offer is accepted by Nisa members and approved by the CMA, we can deliver a win-win for two member-led, community-focused organisations, and in the process create a distinctive footprint within the growing UK convenience retail sector.

“We are looking forward to meeting Nisa members at the roadshow events in the coming weeks, listening to their views and answering their questions.”

The offer is expected to be put to Nisa members to vote upon in November.
Ends

Enquiries:
The Co-op Group
Jon Church 07545 210 812
Russ Brady 07880 784 442

Temple Bar Advisory (PR adviser to Nisa) nisa@templebaradvisory.com 0207 002 1486
Tom Allison 07789 998 020
Ed Orlebar 07738 724 630

Notes to the editor:

About the Co-op Group
The Co-op is one of the world’s largest consumer co-operatives, with interests spanning food, funerals, insurance, electrical and legal services. It has a clear purpose of championing a better way of doing business for you and your communities. Owned by over 4.5 million members, the Co-op has 3,800 outlets in communities across the UK. It employs around 69,000 people and has an annual turnover of over £9.5 billion.

About Nisa Retail Limited
Nisa is a unique member owned organisation, helping independent retailers remain competitive in the food and drink markets. With the retail sector being largely dominated by the multiples, Nisa’s objective is to create benefit, including negotiating the best deals on products, to allow its members to compete effectively. Nisa supports nearly 1,200 local retailers and more than 3,200 stores across the UK. Some operate under the Nisa brand and others under their own names. Nisa supplies the stock they need and the retail support that helps them to grow their business. In the year to ending 2 April 2017, Nisa’s revenue was £1.252bn. EBITDA was £8.6m and profit before tax was £2.8m.