Nisa retailers approve Co-op deal ‘by a whisker’

Nisa retailers have accepted the Co-op’s takeover deal, following two formal votes at a meeting in Leeds.

The deal is now subject to the Competition and Markets Authority’s (CMA) approval. Inside sources told Retail Express they do not expect the regulator to object to the takeover and believe the deal to be completed by the end of March 2018.

One retailer present at the vote results announcement described it as passing "by a whisker".

The first vote required 75% of retailers (weighted for shareholding) to agree to the deal and 75.59% voted in favour by share weighting.

The second vote also required 75% of retailers (weighted by shareholding) to agree to the deal and 75.64% voted in favour by share weighting.

Out of the 1,300 Nisa members, 615 are known to have voted, representing a turnout of approximately 47%.

Nisa chairman Peter Hartley said he was "delighted" with the result. He added: "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."

Co-op Food's CEO Jo Whitfield said: "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.”

The result represents a major swing from initial polling by Retail Express that found the majority of Nisa retailers opposed the deal.

To build support for the merger, both Nisa and the Co-op embarked on a series of roadshows and, in a last-ditch attempt, added more than 200 retailers to a WhatsApp group last week, generating around 8,000 comments.

Retailers from both sides of the deal told Retail Express they were eager to move forward from the deal, although some concerns remain.

Harj Dhasee runs The Village Store in Mickleton and has supported the Co-op's offer since the details were first announced. He told Retail Express: "I'm excited for the future. The deal shows that many of us are ready for change and ready for the opportunities ahead."

One Nisa retailer who was previously against the deal said they were feeling "pretty positive" after warming to the deal before the vote. They said: "Whatever option Nisa members chose would of been a gamble. I'm looking forward to seeing the Co-op fulfill its promises to retailers, and to applying the opportunities these provide in my store."

Another retailer previously opposed to the deal said they were concerned about being "locked in" to the Co-op and unable to sell up for such a long period, and about the need to grow their business in order to qualify for the annual payouts.

Nisa members will receive a one-off payment of up to £20,000 once the deal officially goes through, followed by deferred share payments paid annually for the following three years, and performance-based rebates over the next four years.

The vote follows a period of turbulence at Nisa that saw the departure of CEO Nick Read and the loss of several supply deals including McColl's, Select & Save and the Motor Fuel Group. 

Despite strong annual results and a favourable refinancing deal, fears of Nisa's diminishing wholesale clout drove both Nisa's board and its members to look to convenience sector rivals for support. Sainsbury's were the early front runners to buy the business, but the looming uncertainty of the Tesco-Booker merger prevented it from formally placing an offer, according to industry sources.