The billionaire brothers buying Asda for £7billon have made a bid to take over struggling coffee chain Caffe Nero, according to reports. The offe
The billionaire brothers buying Asda for £7billon have made a bid to take over struggling coffee chain Caffe Nero, according to reports.
The offer comes just hours before Caffe Nero’s creditors and landlords are set to vote on the company’s insolvency plan later today.
Zuber and Mohsin Issa – the owners of petrol stations group EG which struck a deal to buy Asda in September – approached Caffe Nero’s founder and owner Gerry Ford with an offer over the weekend, Sky News reported.
Struggling: Caffe Nero’s landlords and creditors are set to vote on the company’s CVA today
Under the EG proposal, Caffe Nero’s landlords would receive all the rent arrears accrued during the coronavirus crisis.
Earlier this month, the coffee chain was forced to put itself into a Company Voluntary Arrangement, a type of insolvency that allows firms to continue trading while they attempt to get their finances in order.
Mr Ford, who set up the business in 1997, hoped that with a CVA he would be able to renegotiate rent agreements with landlords and reduce costs, instead of having to close down sites.
But the offer from EG could see the vote on the CVA, which is scheduled for later today, to be postponed.
Caffe Nero employs more than 6,000 people in 800 stores in the UK.
It has suffered from curbs on socialising, fewer shoppers in town centres and the government advice for workers to stay away from their offices. It was forced to shut down completely for several months during the first lockdown and is now able to offer takeaways only.
Many of its outlets are situated in town and city centres and at transport hubs, meaning it has lost vast amounts of custom due to people working from home.
Spending spree: Mohsin Issa and his brother Zuber are reportedly trying to buy Caffe Nero
Mohsin Issa, 49, and his brother Zuber, 48, have been on a spending spree recently, with the pair agreeing to a £6.8billion buy-out of Asda at the end of September.
They built up their company EG Group over 20 years from a garage in Bury to a giant turning over £20billion a year.
EG has 6,000 petrol stations and convenience food outlets following a debt-fuelled spending spree to buy thousands of outlets in the US and Australia, and the largest KFC franchise in the UK.
In the three months to September 30, earnings hit £369.9million, up 54 per cent on the same period last year.