16,000 jobs saved as Morrisons beats EG Group in the battle to buy collapsed convenience chain McColl’s

The convenience chain fell into administration on Friday, plunging the future of its 1,100 shops and 16,000 staff into doubt.

Forecourt giant EG – whose owners also run supermarket giant Asda – had been favourites to complete a rescue deal for McColl’s over the weekend. However, EG and Morrisons both tabled late improved offers before the administrators’ Sunday 6pm deadline for offers.

In a statement, Morrisons said: “Morrisons has today agreed with the administrator to buy the McColl’s business.

“The transaction will be structured through a pre-pack administration.

“The administration was initiated by McColl’s board on Friday after McColl’s lenders withdrew their support for the business, and became effective today.

“Morrisons will acquire all of McColl’s 1,160 stores which include 270 Morrisons Daily format stores.

“All McColl’s colleagues will be transferred with the McColl’s business to Morrisons."

The statement from Morrisons added: “McColl’s two pension schemes will be taken on by the Morrisons Group.

“The secured lenders and preferential creditors will be paid in full with a distribution also expected to unsecured creditors.

“Morrisons Wholesale Supply Agreement to McColl’s stores will continue without interruption. McColl’s stores will continue to trade.”

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.”

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 last week after the company delayed the publication of its latest financial results due to its financing talks.