Co-op has entered talks to buy the wholesaler Nisa in a deal understood to be worth £140 million.
Whilst previously Sainsbury’s (LON:SBRY) was reportedly interested in buying Nisa, Co-op are now having “positive” talks with the wholesaler.
“Following this period and subject to approval from our board, we hope to be in a position where we can put forward an offer to Nisa members,” a Co-op spokesman said.
Any bid put forward would need to be approved by the 1,300 shopkeeper members that own Nisa.
Talks between Nisa and Co-op come during talks between Tesco (LON:TSCO) and the wholesaler Booker (LON:BOK), who supply goods to Londis, Premier and Budgens stores. Morrisons (LON:MRW) also recently signed a deal with McColl’s (LON:MCLS) to try and adapt to shoppers’ move away from big supermarkets towards smaller stores.
“ Should an offer of merit emerge from this process, it will be for you, the members, to decide on whether to accept it. However, it is important to stress, that there is no guarantee that an offer will be forthcoming,” wrote Nisa’s chairman, Peter Hartley to shareholder-shopkeepers.
“As you are all aware our business and the convenience sector continue to evolve at pace and the board of Nisa will continue to review serious queries and offers which emerge (within the constraints of any agreed exclusivity period) and which it believes are in the best long-term interest of the members.”
According to Molly Johnson-Jones, senior analyst at Global Data Retail, an acquisition between Co-op and Nisa would help extend geographical reach.
“A Co-op-Nisa partnership provides more benefits than a partnership with Sainsbury’s would have done due to complementary business models, supply chains, and customer requirements,” she said.
Nisa made a pre-tax loss of £5.4 million last year on sales of £1.3 billion.