The boards of Costcutter and Nisa-Today’s have recommended a £200 million merger of both companies.
It is not yet known how the merger will be structured, but Kaupthing, the Icelandic investment bank that put the deal together and will be providing some of the debt finance, is thought to be taking equity in the new company with the existing management teams.
The company already owns a stake in Costcutter after a refinancing deal earlier this year.
Dudley Ramsden, founder of Nisa-Today’s, will become chairman, and Costcutter founder Colin Graves will become chief executive.
Nisa-Today’s shareholders are being offered £500 a share, said sources familiar with the situation. This could make Nisa shareholders between £5,000 and £50,000 each. They will also been given equity in the new company and have representation on the board.
Kaupthing has acquired stakes in Booker and Somerfield over the past two years. The company also backed T&S director Geoff Purdy in a bid to acquire Londis in 2004.
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