Nisa Retail members have given the green light to Co-op Group’s £137.5 million takeover offer, with over 75% voting in favour of the deal.
It helps pave the way for Co-op’s plans to acquire 100% of the convenience store operator, which has around 1,200 shopkeeper members running over 3,200 stores, assuming the deal is cleared by UK authorities.
The retailer said it expects the takeover to be approved by the Competition and Markets Authority (CMA) by the end of March 2018.
Around 24.21% of Nisa’s shopkeeper members voted against the Co-op’s offer during a meeting in Leeds, but the company assured that members will experience “significant immediate and long-term benefits” following the deal, gaining access to Co-op labelled products and “greater scale”.
A combined entity would see the number of stores the Co-op supplies almost double to 7,000, from 3,800 outlets, but under the terms of the deal, Co-op will retain Nisa as a standalone business and brand, as well as take on £105 million of its debt.
“Members will still enjoy the independence to operate their stores as they wish, and will be able to remain part of a member-owned organisation within the growing UK convenience retail sector,” Nisa said.
Nisa chairman Peter Hartley said he was “delighted” that members voted in favour of the deal in “such significant numbers”.
Nisa said it expects the deal to be cleared by UK authorities in March 2018 (PA)
The move would help safeguard the brand during a transformational period for the industry, he added.
“We as a board are firm in our belief that a combination with the Co-op is in the best interests of Nisa’s members.
“The convenience store environment is changing rapidly, and is unrecognisable from that which existed when Nisa was founded more than 40 years ago.
“Co-op will add buying power and product range to our offering, while respecting our culture of independence.”
The deal comes as the supermarket sector is in flux following the announcement of Tesco’s £3.7 billion merger with wholesaler Booker, which is currently undergoing its own Competition and CMA probe.
Booker said last month that it expects the deal to close by early 2018.
In October, Nisa reported a 12.4% rise in total sales to £728 million for the first half of the year.
As part of the takeover terms, Nisa shareholders will receive an equal initial payment, a deferred share payment payable over three years, as well as additional rebates payable over four years.
Co-op Food chief executive Jo Whitfield said the takeover would create a “stronger member-led presence” across the UK convenience store sector.
“Together Co-op and Nisa can go from strength to strength, serving customers up and down the country and creating real value for them in their communities.
“Our offer remains conditional on CMA approval and we remain in discussions with them.”