Caffè Nero rejects takeover bid from billionaire Issa brothers
Caffè Nero has rejected a takeover bid by the billionaire brothers behind EG Group, a chain of petrol stations, ahead of a key vote on its restructuring process.
The coffee chain said it had received an unsolicited offer from a third party on Sunday.
Caffè Nero's landlords are due to vote on a company voluntary arrangement (CVA) plan tonight (30 November) that would see rents cut across its estate.
Under the takeover bid, first reported by Sky News, EG Group's founders Mohsin and Zuber Issa proposed paying Caffè Nero's landlords in full for rent arrears accord during the coronavirus pandemic.
But the coffee chain rejected the proposal, claiming the uncertainty would result in a worse outcome for the company's creditors and was not in the "long term interests" of the business.
Caffè Nero said in a statement: "It is the directors view that this party's clear intention is to disrupt the CVA process currently underway as a precursor to opportunistically acquiring the company at a later date."
It claimed the offer had been made "without any understanding of Caffè Nero's financial and trading position" and was unlikely to be approved by its external lenders and shareholders, resulting in an outcome for creditors that was "far inferior to the current CVA proposal".
Caffè Nero employs more than 6,000 people across its 800 UK stores. It announced plans to launch a CVA earlier this month after the second national lockdown in England ‘decimated' high street trade.
It is not certain if any stores will close under the CVA, but if they do the numbers are expected to be minimal. The result of the CVA vote will be announced on Tuesday.
Caffè Nero said: "Ultimately, [the CVA] provides the company with the flexibility required for it to withstand the devastating impact of the current pandemic, and any further subsequent lockdowns, and emerge strongly to regain previous trading momentum once restrictions are lifted."
The coffee chain has modified the CVA proposal so in the event of a future sale to EG Group compromised landlords will have their rent arrears paid in full.
The Blackburn-born Issa brothers founded EG Group as Euro Garages in 2001 and now run almost 6,000 petrol stations in Europe, the USA and Australia. The business helped US restaurant brand Sbarro pizza make its UK debut this year through a partnership with its forecourts.
In September it was announced the pair are buying Asda for £6.8bn with the backing of private equity group TDR Capital. The duo also own the Stanley House Hotel & Spa in Lancashire, and received CBE's in the 2020 Queen's Birthday Honours.
EG Group did not respond to a request for comment.
Image: shutterstock
