Co-op launches bid for ailing Alldays

Alldays, the struggling convenience store chain, has received a takeover approach from the Co-operative Group.

Although some of the main supermarket groups have been linked to Alldays in the past, it is thought that the mutually owned retailer has got in first. Alldays is worth just £2.4m on the stock market, having seen its share price collapse under the weight of debts totalling £190m.

The Co-op is looking to strike a deal with Alldays' lender, Royal Bank of Scotland, about taking on the bulk of the debt but it will want some of the loans written off. Alldays, which has about 600 stores, ran up the debts when it borrowed to buy in its franchises.

The Co-op, which declined to comment, has long said it wants to expand through acquisitions. Industry sources said that, with its £5bn of annual turnover, the Co-op would not have a problem with a deal of this size. About half the Co-op's 1,100 outlets are convenience stores, a sector of retailing that has increasingly drawn the attention of the Tesco and J Sainsbury.

At its interim results, for the six months to 28 April, Alldays reported a loss of £4m on turnover of £251m and warned that "financial reconstruction is still required".

Alldays in effect put itself up for sale more than a year ago but the approach from the Co-op is the first serious interest in the group.