Supermarket chain Morrisons is poised to buy McColl's in a move that will save 16,000 jobs.
The deal is expected to be announced later today, after the convenience chain announced its administration last week, according to reports.
McColl's collapse on Friday was the largest retail collapse since the Edinburgh Woollen Mill Group in 2020 and Debenhams, which employed about 12,000 people, in that same year.
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But after emergency rescue talks over the weekend, Morrisons has agreed to buy McColl's for an undisclosed amount, beating away competition from the billionaire Issa brothers, who own Asda, according to The Mirror
McColl's, which has 1,400 stores, has a wholesale tie-up with Martin's newsagents. as well as Morrisons. The chain is also the largest operator for the Post Office in the UK, operating a branch from around 600 of its stores.
The deal will be what's called a pre-pack administration - where Morrisons will acquire the chain as soon as it enters insolvency proceedings today. A “pre-pack” is an arrangement under which the sale of all or part of a company's business or assets is negotiated with a purchaser prior to the appointment of the administrator, and the sale contract executed on the appointment of the administrator or very shortly afterwards.
Morrisons already runs hundreds of McColl's stores, which are branded as Morrisons Daily and is also a major supplier to McColl's, and provides products under the Safeway brand.
McColl's is understood to have been in discussions with potential lenders to shore up the business for several months, after it struggled during the pandemic due to supply chain issues, inflation and a heavy debt burden.
Morrisons was initially lined up to rescue McColl's before it went into administration last week, but its bid for the convenience store chain was rejected. The deal will protect the pensions of all McColl's workers. as well as save their jobs. Professional services firm PwC is handling the administration and is expected to make a formal announcement today.
The first McColl’s store was opened in Glasgow in 1901 by former Newcastle United centre forward Robert Smyth McColl. The group was founded in 1973 and it has purchased and merged with various other chains in its 49 years of trading, and now has around five million customers every week.
Last week McColl's was set to have its shares suspended from the London Stock Exchange as bosses said they would be unable to get its accounts signed off by auditors in time.
