The McColl’s convenience store chain has said it is considering undertaking a capital raise fund to accelerate the expansion of its partnership with supermarket Morrisons.
The group made the announcement today (9 August) after Sky News reported over the weekend that McColl’s had approached institutional investors regarding a potential share placing to raise £30m.
Sources close to McColl’s also revealed to the outlet that Jonathan Miller, the company’s chief executive, was going to invest a “seven-figure sum” in McColl’s shares as part of the fundraising.
It is understood that a portion of the proceeds raised will be used to pay down some of the group’s debt.
McColls, which operates 1,200 convenience stores and newsagents in the UK, has a supply partnership with Morrisons.
As part of the deal, 300 McColl’s stores have been converted to the Morrisons Daily brand and likeness. The pair’s partnership is set to run until 2027, following a three year extension.
McColl’s, said: “Further to recent media reporting, McColl’s Retail Group plc confirms it is currently exploring options relating to a potential capital raise to increase the number of its Morrisons Daily store conversions, accelerate the pace of roll-out of its Morrisons Daily store conversion programme, and strengthen its balance sheet.
“No final decisions have been made on whether to proceed with a capital raise or with regards to the timing or size of any such capital raise. The company will make a further announcement if and when appropriate.”
Sky also revealed that McColl’s told investors that it is seemingly “unaffected” by the Morrisons bidding war which has unfolded this summer.
However it has since been revealed that one the supermarket’s suitors, Clayton, Dubilier & Rice (CD&R) has been awarded more time to consider a counter takeover bid.
The UK’s takeover panel, which monitors takeover activity, said that CD&R would have until 20 August to announce a “firm intention” to make an additional offer for Morrisons.