ONE of the north’s biggest coffee chains, Caffè Nero, has rejected a takeover bid by billionaire Issa brothers and will now continue with plans to restructure the hospitality business.
Mohsin and Zuber Issa’s Blackburn-based EG Group launched a last ditch intervention over the weekend ahead of a vote by landlords on a company voluntary arrangement (CVA) to open the door to rent cuts and shop closures.
The brothers, who have already bought Asda and Belfast couple Michael and Lesley Herbet’s KFC empire in 2020, wrote to the coffee company proposing to buy the chain from its founder and controlling shareholder, Gerry Ford.
The letter, first reported by Sky News, is thought to have included a much improved offer to landlords than what is on offer from the CVA.
But Caffè Nero last night wrote to its creditors to confirmed that the EG Group offer had been rejected because the bidders had not engaged with the company and did not understand its financial situation.
Caffè Nero has 30 outlets spread across the north, including one dozen coffee shops throughout central Belfast.
The wider group, which includes 800 cafes employing around 6,000 staff, has been badly hit by the coronavirus pandemic and government restrictions.
Even with cafes in the north allowed to temporarily open last week and a surge in shop spending ahead of the lockdown on non-essential retail, analysis by high street monitor Springboard suggested footfall in Northern Ireland was down by a third on the same week last year.
Footfall in central London was down by as much as 78 per cent on last year.
Caffè Nero appointed KPMG in September to help negotiate rent cuts with landlords.
Landlords last night went ahead with the vote on the CVA. The results are due to be released on Tuesday afternoon.
The EG Group’s bid comes less than three months after the Issa brothers hatched a £6.8bn deal to buy Asda from Walmart.
In March this year, EG acquired 146 KFC restaurants from the Herberts, one of the north’s richest couples.
However, there have been questions over the group’s finances after its auditor Deloitte quit in October, reportedly over governance concerns.
KPMG subsequently stepped in as auditor.
