Asda's owners have tabled a bid to rescue McColl's.
McColl's convenience chain has entered administration, putting the future of 1,100 shops and 16,000 employees at risk. The PA news agency understands Morrisons has also approached PwC, who are advising lenders to McColl's.
A rescue deal would also take on the business as a going concern, absorb its debts of over £100 million and take responsibility for the company's pension scheme. However, Business Live reports the Issa brothers' EG Group, who own Asda, have now swooped in to beat their supermarket rivals to the acquisition.
READ MORE: All the McColl's stores at risk as company on brink of collapse
The EG Group's brands also include Cooplands, Euro Garages and LEON, are they are in talks to snap up McColl's, which has appointed PwC as administrators "to protect creditors, preserve the future of the business and to protect the interests of employees".
In a statement issued to the London Stock Exchange, McColl's added it was "regrettably therefore left with no choice". It said: "Further to the announcement on 3 May 2022, the company's senior lenders have this morning declined to further extend the waiver of the company's banking covenants, which has now expired. Whilst the constructive discussions with the company's key wholesale supplier to find a solution with them to the company's funding issues and create a stable platform going forward had made significant progress, the lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them."
McColl's also said PwC intends to "implement a sale of the business to a third-party purchaser as soon as possible". The retailer added: "Accordingly, the directors of the company and of each of Martin McColl Limited, Clark Retail Limited, Dillons Stores Limited, Smile Stores Limited, Charnwait Management Limited and Martin Retail Group Limited have resolved to file documents at Court today to appoint Mark James Tobias Banfield, Robert Nicholas Lewis and Rachael Maria Wilkinson of PwC as administrators of the company and of the named subsidiaries.
"That application is expected to be approved by the Court over the course of the day. The group has requested that the listing of its ordinary shares be suspended with immediate effect."
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