Wilko’s administrators are facing pressure to accept a rescue deal for the ailing budget retailer after a second last-minute white knight bid worth £90m emerged from an Anglo-Canadian private equity firm.
The gardening to beauty retailer, which has 400 stores and employs almost 12,500 people, called in administrators from PricewaterhouseCoopers earlier this month after running short of cash. Shops are expected to close within weeks, with thousands of job losses unless a buyout can be secured.
M2 Capital, a restructuring specialist which owns a string of upmarket hotels around the world under the Como brand and is in the process of buying Michigan-based car parts maker Superior Industries, is understood to have put forward a bid that would keep the entire Wilko chain trading.
The firm, which has offices in Mayfair, central London, is headed by Robert Mantse, a former PwC expert in Russian metals and mining mergers and acquisitions.
The surprise indicative offer from a company that had only sought information on Wilko in the last few days is understood to have been put forward late on Friday. It came after a competing bid from Doug Putman, the owner of HMV, who has pledged to keep 350 outlets trading under the Wilko brand and pay off £40m of debts owed to restructuring specialist Hilco as well as some bank debt.
Putman, who rescued HMV from administration in 2019 and returned it to profit, submitted an improved offer on Friday after administrators dismissed his offers put forward earlier in the week as they would deliver less than a break up of the business.
Administrators are understood to be considering all offers put forward, including the two for the whole business in order to find the best outcome for creditors led by restructuring firm Hilco which is owed £40m.
Andy Prendergast, the national secretary of the GMB union, which represents thousands of Wilko staff, said it would be “a disgrace” if bids that could save jobs were disregarded.
“12,500 jobs cannot be sacrificed for a few pence in the pound for creditors. If there are viable bids that protect jobs, these have to be prioritised,” he said.
Prendergast also questioned the role of Hilco which is understood to be acting as an adviser to the administrators at PwC on the valuation of some assets while also being a creditor.
“Hilco cannot be a neutral party if they are owed money,” he said.
It is understood that Hilco, which is one of a handful of specialists in valuing and selling off stock for failed retail businesses, was appointed on an arms-length contract by the administrators.
Wilko’s property assets, including freeholds and leaseholds on stores, its head office and a Welsh distribution centre, were valued at £41m on its books in 2022. The group’s stock is also likely to be worth tens of millions of pounds.
The chain’s stores are expected to be bought by rival bargain retailers such as Poundland, Home Bargains, Primark and B&M, who will rebrand them and may not retain the existing staff, while landlords in some sites may divide up the space.
Property experts said it was unlikely any individual retailer would take more than 50 stores.
Wilko, founded in 1930 when JK Wilkinson opened his first store in Leicester, stepped into many high street gaps left by the collapse of Woolworths in late 2008.
The family, which still controlled the group until administrators were called in on 10 August, paid themselves £3m in dividends in the 12 months to the end of February 2022 despite falling to a loss that year, as first revealed by the Guardian.
