Morrisons has signed a deal to save convenience store chain McColl's, saving 16,000 jobs after the chain officially entered administration.
The company signalled it was going to enter administration on Friday, with rival bids being submitted by the supermarket giant and EG Group. BusinessLive reported earlier that the Blackburn-headquartered retailer, whose brands include Euro Garages, Cooplands and LEON, had lost its attempt to buy McColl's.
Morrisons will pay off McColl's debts, take on its 1,160 shops and pension schemes, with 2,000 members, Business Live reports.
Read more: Morrisons beats Asda-owning billionaire Issa brothers to rescue McColl's and save all 16,000 jobs
David Potts, Morrisons chief executive, said: "Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders. This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners. We all look forward to welcoming many new colleagues into the Morrisons business and to building on the proven strength of the Morrisons Daily format."
Final bids had been submitted ahead of the 6pm deadline on Sunday by EG Group, the retail giant owned by the Issa brothers and TDR Capital, and Morrisons. The offer from Blackburn-headquartered EG Group, whose brands also include LEON, Cooplands and Euro Garages, included keeping 16,000 jobs and all of McColl's stores open.
McColl's has struggled financially in recent years after witnessing soaring costs due to supply chain disruption, inflation and its large debt burden. On Thursday evening, McColl's had said it was in talks over "potential financing solutions" to resolve its funding issues.
Shares in McColl's were suspended earlier this week after the company delayed the publication of its latest financial results due to its financing talks.
A EG Group spokesperson said: "EG Group notes today’s announcement by PwC in relation to McColl’s Retail Group (“McColl’s”) following a pre-pack administration process.
"EG confirms that it was interested in rescuing the McColl’s business. Our proposal would have safeguarded the UK jobs of 16,000 McColl’s colleagues, increased the pay of all hourly-paid colleagues aged 18 and over to £10.05, maintained all the currently trading stores, and ensured continued provision of invaluable community services, such as Post Office counters.
"Moreover, EG Group had proposed to maintain the link between McColl’s pensions schemes and the business, respecting historical promises made to the members of the schemes.
"EG also hopes the announcement will bring to an end the uncertainty for the hard-working colleagues at McColl’s and wishes them the best for the future."
