Co-op makes £137.5m offer to buy wholesaler Nisa

Takeover of the member-owned Nisa, which has thousands of independent stores, will now be put to a vote

Nisa shopkeepers will be able to select Co-op products to sell (Rex)

The Co-op has made a £137.5m formal offer to buy member-owned wholesaler Nisa, which has thousands of stores across the UK.

Nisa’s shopkeeper members are now expected to vote on the deal in November, after the board recommended that they take the offer.

As well as £137.5m to buy the full shareholding of Nisa and associated deal costs of £5.5m, the Co-op will takeover Nisa’s £105m debt if the takeover goes ahead.

“We firmly believe that the combination with the Co-op is in the best interests of our members," said Nisa chairman Peter Hartley. "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.”

Nisa’s shopkeeper members will be given access to Co-op’s products and the option to apply to become a full Co-op franchisee.

Jo Whitfield, chief executive officer for food at the Co-op, said: “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 [Competition and Markets Authority], 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."

In August, the Co-op group entered exclusive talks with Nisa as other supermarket chains made moves to grow their reach into the convenience store market.

Nick Read, Nisa’s chief executive, stepped down at the end of September. Read had returned the business to profit after joining in December 2014 and was responsible for bringing it into takeover talks.

Nisa had also attracted takeover interest from Sainsbury’s, but the talks with the supermarket giant ended after the CMA raised concerns about a similar merger between Tesco and wholesaler Booker.

Nisa buys and distributes groceries to small shops across the UK with many using its brand name. Its members run over 2,500 stores.