UK café chain dismisses takeover bid by Zuber and Mohsin Issa, whose EG Group business acquired UK supermarket giant Asda from Walmart in October 2020
Photo credit: Christopher Rusev
Troubled international coffee chain Caffè Nero
has rejected a takeover bid by UK entrepreneurs, Zuber and Mohsin Issa. The EG Group founders, who operate more than 5,200 petrol stations in Europe and the US, have previously forged retail partnerships with prominent brands, including Esso, BP, Burger King, Greggs and Starbucks. In October 2020, The Issa siblings made headlines after acquiring UK supermarket giant Asda from Walmart for a reported $6.8bn.
However, Caffè Nero Group, which operates more than 1,000 Caffè Nero stores in 11 countries, including 660 in the UK and a further 150 Coffee #1 and Harris & Hoole sites, has vowed to continue with a planned company voluntary arrangement (CVA) rescue deal. Overseen by KPMG, the CVA would enable Caffè Nero to renegotiate rents and restructure debt in the wake of severe Covid-19 disruption to its coffee shop business, especially in key town centre locations.
Dismissing the takeover bid, a Caffè Nero spokesperson said the "clear intention is to disrupt the CVA process… The lenders are aware of the approach referred to above and have not requested a change in strategy and shareholders have undertaken to reject the offer."
"Like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action," commented Gerry Ford, Caffè Nero’s Founder and CEO, in November 2020.
Caffè Nero is not the only major UK café chain taking radical action to shore up its business during the pandemic. In November 2020, food-to-go and coffee chain Greggs announced 820 jobs would be lost across its 2,000+ UK stores. Earlier that month, Pret A Manger
said it would permanently close six more sites in London following an announcement in August it would reduce its UK workforce by 2,800 staff and permanently close 30 stores. In September 2020 the UK’s largest coffee chain, Coca-Cola-owned Costa Coffee
, announced a company restructure putting 1,650 jobs at risk due to Covid-19 disruption.