Top story
Morrisons and EG Group are reportedly locked in a two-way fight to rescue convenience chain McColl’s after both made a last-ditch improvement to their bids.
Reports last night suggested Morrisons remains committed to winning control of its convenience partner McColl’s, despite EG Group, whose owners control rival supermarket chain Asda, appearing favourite to secure a deal on Friday.
Morrisons is said to have put in an improved offer ahead of a Sunday deadline imposed by McColl’s administrators PwC.
The improved bid is thought to pay Mcoll’s lenders fully and up-front, with Morrisons previously looking to roll the debt over onto its own balance sheet – a proposal rejected by the banking consortium owed more than £100m by McColl’s which led to the appointment of administrators on Tuesday.
Meanwhile, EG Group is reported to have improved its own offer after concerns its proposals would
EG Group reportedly pledged to take responsibility for the McColl’s pension scheme, to avoid a potential cut payouts to the chain’s pensioners.
The trustees of the McColl’s pension schemes had previously written to the Business Secretary, Kwasi Kwarteng, urging him to ensure pension scheme members were fully protected.
Both deals would be pre-pack administrations.
PwC is set to be officially appointed as administrators by courts later this morning.
Retail analyst Nick Bubb suggested the Morrisons deal would be the best outcome for the chain.
“Common sense would suggest that, as the wholesale supplier, Morrisons is better placed than EG Group to run the bankrupt business,” he said. “So we will see today if common sense prevails.”
Morning update
Danone has sold up its 25% stake in Chinese infant formula business Yashili to Chinese dairy giant Mengniu and the 20% stake it holds in the Inner Mongolia Dairy joint venture, while itself buying Dumex Baby Food Co from Yashili.
Dumex is itself a manufacturer of infant milk formula in China, which Danone will acquire in its entirety.
The proposed transactions are not required to close simultaneously and are all likely to close last this year.
The completion of these transactions will lead to the conclusion of the partnership Danone held with Mengniu over the last few years, following the disposal of Danone’s 9.8% minority stake in Mengniu in 2021.
Danone said China remains “highly strategic” for the company and the announcement “will notably allow the company to further expand its ability to locally manufacture Infant Milk Formula products”.
Elsewhere, AIM-listed CBD goods producer Love Hemp Group has updated the market on the temporary suspension of the trading in its shares.
The reason for the suspension is that Peterhouse Capital has resigned as the AQSE Corporate Advisor and the Company needs to appoint a new corporate advisor in order that trading can recommence on the AQSE Exchange.
Love Hemp is in discussions with a new advisor and expects to update the market with an appointment soon.
Peterhouse resigned following the update by the company that an investor in the February 2022 placing had failed to complete their investment of £1.2m.
It said its board has commenced a review of the situation and will look to put in place additional controls in order to prevent the potential for a similar issue occurring in the future.
In addition, a board structure review being conducted by its independent non-executive Director. As a result it will search for a new CFO and another independent non-exec director.
Andrew Male, executive chairman and director commented; “The board are committed to protecting Love Hemp’s “best in class” brand reputation and the current Board, strategic and operational review will ensure this is achieved.
“The Board believes Love Hemp has significant growth opportunities and our review is designed to support this growth and enhance long term shareholder value.”
On the markets this morning, the FTSE 100 has opened the week down 0.4% to 7,360.3pts.
Risers include Sainsbury’s, up 1.3% to 230.9p, Kerry Group, up 1.2% to €99.50 and British American Tobacco, up 1.1% to 3,335p.
Fallers include Deliveroo, down 5.9% to 345.5p, Deliveroo, down 4.2% to 94.2p and Science in Sport, down 3.1% to 62p.
This week in the City
The major news as we go into the week will be the fate of McColl’s, with administrators PWC expected to be officially appointed today a sale to either Morrisons or EG Group is likely to swiftly follow.
It’s a quieter week in terms of scheduled company news.
Ingredients group Treatt is set to post interim earnings tomorrow. The BRC-KPMG Retail Sales figures for April are also out on Tuesday.
Compass Group releases half year results on Wednesday, while Coca-Cola HBC will post its Q1s on Thursday.
Internationally, Coty and Tyson Foods release Q3s later today, US/Dutch retailer Koninklijke Ahold Delhaize posts its Q1s on Wednesday and Beyond Meat posts its first quarter results on Thursday.
No comments yet