Grocery wholesaler Nisa-Today's is reported to be in “advanced merger negotiations” with convenience store group Costcutter.
Telegraph.co.uk reports today that the proposed merger is being put together by Kaupthing, the Icelandic investment bank and private equity group.
Nisa-Today's, a buying group set up for independent retailers, has between 700 and 800 wholesalers and retailers who are all equal shareholders in the company. One of its members is Re:fresh Independent Retailer of the Year 2005, upmarket northern chain Booths. Nisa-Today's turnover was over £1 billion last year.
Costcutter is a member of Nisa-Today's buying group and also has its own franchise operation of around 1,400 stores. It is majority owned by Colin Graves, chairman of Yorkshire Cricket Club, and some of the company's management.
It is reported that Kaupthing is involved in financing the deal and the investment house will take an equity stake in the new company. This comes just six months after it took a stake in the consortium that took Somerfield private.
A telegraph.co.uk source said: "The Nisa-Today's Holding's board has been discussing this [a deal with Costcutter] for the last nine months".
The main board of Nisa-Today's is said to be meeting today to receive a presentation from Kaupthing on the financial details of the proposed merger.
If the board approves the deal, Nisa-Today's own shareholders will have to ratify the merger.
"There will be masses of synergies" said a source involved in the deal. “The merger should allow the enlarged company to make further acquisition in the independent grocery sector, which should ultimately give them better buying terms from suppliers,” said the article.
None of Kaupthing, Nisa-Today’s or Costcutter have yet commented on the situation.
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