Big 4 grocer Morrisons and Asda owners, the Issa brothers‘ EG Group, have both tabled final offers to secure a rescue deal for collapsed convenience retailer McColl’s.
McColl’s fell into administration on Friday, affecting its 1,100 store portfolio and 16,000 employees.
Forecourt giant the EG group, whose owners also run Asda, had been favourites to complete a rescue deal for McColl’s, however, it is understood both EG Group and Big 4 grocer Morrisons tabled late improved offers prior to the administrators’ Sunday 6pm deadline for offers.
Morrisons’ early approaches had reportedly been rejected by lenders who preferred EG’s offer to instantly repay more than £160 million in debts from McColl’s. However, it is believed that Morrisons has now said it will also repay the lenders in cash.
The EG group has also reportedly proposed to retain McColl’s stores and employees, also promising to increase the lowest rate of staff to £10.05.
READ MORE: McColl’s admits administration is ‘increasingly likely’
Morrisons is currently McColl’s wholesale supply partner but is expected to immediately cease its deal if its takeover move is unsuccessful.
The news comes as the EG group has been urged to look after McColl’s pension liabilities, in a move that means that its 2,000 members will avoid a cut of up to 20% to their promised pensions over their lifetimes.
Trustees for the McColl’s pension schemes have also called on the Business Secretary Kwasi Kwarteng to do whatever he can to ensure pension scheme members are well protected.
A spokesperson for the Trustee of the McColl’s Pension Schemes said: “Any company looking to acquire McColl’s must do the decent thing and ensure that promises made to staff about their pensions are honoured.
“We would be extremely surprised if any organisation with an interest in demonstrating good corporate citizenship were to use a pre-pack administration to cease supporting the schemes, with absolutely no engagement with the trustees.
“It is a matter of great regret to the trustees that the current legislative framework for pensions appears unable to protect members’ benefit entitlements in this situation.
“The schemes currently receive £1.75 million a year from McColl’s in deficit recovery contributions, and are sufficiently well funded such that these payments are due to end next year. Therefore the cost to any bidder in taking on the schemes is negligible in the context of the value of the overall transaction, but would make an enormous difference to individual members of the schemes, who stand to lose out if the link to the company is lost.”
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