Morrisons tipped to beat EG in race to buy McColl’s
- Credit: PA
Morrisons is expected to win control of collapsed retailer McColl’s after a takeover battle with EG Group.
The convenience chain fell into administration on Friday, plunging the future of its 1,100 shops and 16,000 staff into doubt.
There are 12 McColl's shops across Norfolk, including in Norwich, North Walsham, and Great Yarmouth; as well as about 12 in Suffolk, including in Ipswich.
But it has now been revealed that Morrisons is set to triumph following an offer which will protect all of McColl’s workforce.
Forecourt giant EG – whose owners also run Asda – had been favourites to complete a rescue deal for McColl’s.
Both EG and Morrisons tabled late improved offers before the administrators’ Sunday 6pm deadline for offers.
It is understood that EG has bowed to pressure to look after McColl’s pension liabilities, in a move that means that its 2,000 members will avoid a cut of up to 20pc to their promised pensions over their lifetimes.
Trustees for the McColl’s pension schemes have called on the business secretary Kwasi Kwarteng to do whatever he can to ensure pension scheme members are well protected.
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Morrisons’ early approaches had reportedly been rejected by lenders who preferred EG’s offer to instantly repay more than £160m in debts from McColl’s.
It is believed that Morrisons has now said it will also repay the lenders in cash.
McColl’s filed a notice for administration on Friday and is now expected to formally enter administration today before a pre-pack deal is completed.
It is understood that EG group has proposed to retain the retailer’s stores and staff, promising to increase the lowest rate of McColl’s staff to £10.05.
However, it is predicted that any sale to EG could result in short-term disruption to supply for McColl’s stores.
Morrisons is currently McColl’s wholesale supply partner and is expected to immediately terminate its deal with the convenience chain if its takeover move is unsuccessful.