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I would say the first 31mln Sell looks like a Buy to me.
Looks like somebodies just bought circa 12% of Petroneft and that was at a snip, 0.15p compared to a few months ago when the CEO was first reported wishing to buy the assets of the company when the share price was around 8 times higher at 1.3p.
Even though 12% has been bought the share price continues to fall.
Morrisons coughed up some £182m to snap up beleaguered convenience store operator McColl’s, defeating a rival bid from Asda owners the Issa brothers.
The newsagent chain’s equity value was worth around £3m earlier this month while senior creditors were owed some £160m, documents from administrators PwC revealed.
While the Issa’s EG Group had offered “materially” more cash than private equity owned Morrisons, the grocer won out after it pledged more cash for unsecured creditors. Morrisons also clinched the deal due to its position as McColl’s main supplier.
Note - Morrison's was by far the biggest Unsecured creditor of McColl's.
Four credible bidders had been eyeing a takeover of the debt-laden firm in its last few months before calling in administrators.
However, the number of bidders had slimmed to three by the time McColl’s shares were suspended on 6 May, narrowing further to just Morrisons and forecourt operator EG Group.
A court application process for plunging the companies into administration was placed on hold on Friday 6 May, until Monday 9 May, the documents revealed.
This was partially as the administrators could not trade the business over the weekend, ‘as they did not have funding to support trading, and practical issues such as the sales of alcohol and other licenced goods would have been prohibited.”
What’s more, PwC revealed that had the appointment concluded on the Friday, joint administrators would have completed a sale of McColl’s business and assets to EG Group.
At this stage in time, a sale to the petrol court operator – referenced by PwC in the documents as ‘Party A’ – would have “kept all stores open, preserved the roles of 16,000 employees, seen a full return to secured and preferential creditors with a likely dividend to unsecured creditors in excess of the prescribed part.”
Both parties submitted bids including to take over the entire store estate and its employees, a transfer proposal for the pension schemes and cash consideration to acquire McColl’s that would see all secured and preferential creditors paid in full with a distribution to unsecured creditors.
This is how I see things happening when it comes to McColl's.
This morning the courts will formally put McColl's in to administration then with in an hour either EG Group or Morrisons will buy McColl's from the administrators.
The bid from Morrisons – the sole supplier to McColl's – would have protected the 'vast majority' of staff and stores as well as its £141m pension plan was rejected on Friday.
But Morrisons returned with an improved deal that would see the lenders repaid in full immediately, satisfying one of their key demands.
EG Group is thought to have followed that up with its own last-ditch bid – including a commitment to honour McColl's pensions, according to sources.
It is thought that PwC, which is advising McColl's lenders, is preparing to set up a showdown between the rival bidders in which they will present their best offers for the group.
Supermarket chain Morrisons has tabled a new offer to buy the troubled convenience store chain McColl’s Retail Group.
EG Group, the petrol station empire owned by the billionaire Issa brothers, has been poised to buy McColl’s which appointed administrators from PwC for its 1,100 stores.
But Britain’s fourth largest supermarket group has tabled an improved offer.
It already has a partnership with McColl’s and has offered to take on its debts. It is also understood to be willing to match EG Group’s offer to pay McColl’s lenders – including NatWest Group – in full, as well as its pension commitments.
Since IPO in 2014, McColl's have paid circa £40mln in dividends, if they had never paid a dividend McColl's would have had sufficient funds to have carried them through until all the Morrison Daily conversions were fully up and running.
The Chairman of McColl's sold his circa 10% holding right at the very very top for 295p, this really told us, the retail share holder it is time to also sell out. Sadly many retail share holders listen to the latest broker share price target and at the time they were giving a price target of 320p which kept most of the retail investors on board.
Following the news that McColl’s has fallen into administration; Honor Strachan, food & grocery analyst at GlobalData, a leading data and analytics company, offers her view: “McColl’s move to start selling fresh produce was implemented too late for the retailer to capitalize on consumers’ shift to local shopping during the COVID-19 pandemic. Stores stocked with Morrisons’ fresh produce reportedly performed well, but the rollout was not fast enough to secure footfall, as consumers turned to online shopping or nearby convenience stores that had better ranges and a more pleasant shopping environment. Indeed, much of the McColl’s estate is underinvested and has fallen behind the quality of rivals.
“Pre-pandemic, McColl’s held a stable share of the UK convenience market, estimated at 4% in 2019. However, this dropped to 3.3% last year–falling from seventh to ninth place in just two years. The retailer clearly failed to adapt to the swift changes in shopping habits, despite neighbourhood convenience players performing better than those exposed to urban areas.
“McColl’s tie up with Morrisons makes the grocer the most likely candidate for a late rescue bid, securing the future of its wholesale business and the Morrisons Daily fascia. However, Asda owners EG Group could scupper this, following reports that the company is looking to acquire the flawed convenience chain. During a period of intense cost pressure on UK grocers, and an unfavourable outlook for margins and profitability, an acquisition for either of the private equity owned grocers would be a massive undertaking and a distraction from their core business – especially as raising cash to help absorb these pressures and to invest in retail prices should be the primary focus this year.”
Thousands of jobs at risk as convenience store giant McColl's teeters on brink of collapse:
The operator of hundreds of Morrisons Daily stores could appoint administrators as soon as Friday amid fading hopes of a rescue deal, Sky News learns.
The company's imminent collapse is expected to spark renewed interest in a partial takeover from both Morrison's and EG Group, the petrol retailing giant owned by TDR Capital and the billionaire Issa brothers Mohsin and Zuber.
Retail industry sources said on Thursday that the situation remained fluid but a collapse into some form of insolvency proceedings was now more likely than not.
McColl’s has paused the rollout of its Morrisons Daily format in a bid to conserve cash and stave off administration, Retail Week has learned.
In an internal memo sent to staff in recent days, the embattled convenience store chain said although the Morrisons Daily format was performing well, McColl’s has stopped the conversion of more stores to conserve much-needed capital.
I'm wondering if the nearly at the end of the day 250k & 500k Sell was Klarus further reducing their holding to 6.8mln?
Hopefully by the end of next week klarus will be totally out of McColl's thereby reducing the pressure on the McColl's share price.
Over the past 2 weeks Klarus has reduced by 3.4mln shares. Selling these shares at well under 10p when he had purchased them at 295p.
Klarus has now sold circa 75% of his holding in McColl's for sub 25p.
Potential Morrison Daily conversions to over 700 stores.
Currently converting stores with as little as 1,000sq ft.
McColl's have 290 stores with less than 1,000sq ft.
Conversions with largest sq ft seem to have the least percentage revenue uplift.
Conversions seem to be trying to gear themselves more towards the female shopper and higher socio-economic shopper.
1.8 years pay back and £45k EBITDA uplift on converted stores.
West Midlands stores seem to be the only ones that are still continuing to have supply chain issues.
I've just been looking at the feedback people are leaving when it comes to Morrisons Daily's and on the whole many say that they are expensive.
Where my parents live there is a Waitrose and across the road is a Spar. On many products, often the Spar is as much as 20% more expensive then the Waitrose for exactly the same products. The only reason why I can see the Spar doesn't go under is that it opens 1 hour earlier than the Waitrose and closes 2 hours later.
What have I managed to glean when it comes to the stores that have been converted into Morrison's Daily's.
1. As far as I can see, so far none of McColl's stores in Scotland have been converted.
2. 152 stores have been converted (this information has a circa 3 week lag time, therefore can add around an addition 18 stores to this number to get a more accurate up to date number) with the stores in the Midland's and North West seem to have been given priority in the number of conversions so far. While McColl's stores in the South West, Wales and East Anglia, very, very few have been converted so far - in other words seems to be high population density areas being prioritised over the low population density areas.
3. Stores that have been converted seem to be far better stocked than stores that are still to be converted or other McColl's stores that are selling Safeway products. Therefore it seems to me that Morrison's are giving Morrisons Daily Fascia stores priority over other stores Morrisons are the whole sale supplier to.
4. Friendly staff.
Negatives seem to be:
1. They are expensive.
2. Since being converted some of the stores are closing a couple of hours earlier then they did when McColl's own branded stores.
It looks like McColl's have divested themselves of a further 16 stores since I last posted giving numbers just over a week ago.
This means that for the month of November alone McColl's have divested 30 stores bringing the total for the year so far to 95 stores being divested.
As I posted just over a week ago it seems to me that McColl's management are really getting a shift on to get their store optimisation plan done and dusted by years end. Also by this time next year McColl's will have converted at least 450, 40% of their stores to Morrison Daily's - If this isn't management doing things fast enough to turn McColl's round then I don't know what is...
McColl's management have divested over 250 stores over the past two years, now that's some going!
When McColl's IPO in 2014, they're more or less a newsagents come Arkwrights corner shop, shop portfolio company leaving the management a herculean task of bringing the company into the 21st century.
It seems to me when the management started the whole process of modernising McColl's they didn't realise at first how quickly this turning around had to be done.
My main criticism of the management is that they didn't go for a rights issue when the share price was over 200p. If they had done so would easily have been able to raise double the amount, £70mln compared to the finance raising they did a couple of months ago. This would have left McColl's in a far better financial position then it is to day.
Is McColl's the next Woolies or the next Next???
Both the brokers reports I've read seem on the whole positive about McColl's in the coming years after the Morrison Daily roll outs.
Analyst Matthew McEachran, at the group’s brokers Singer Capital Markets, is estimating that the current year to the end of this month will see revenues of £1.13bn (£1.24bn) while showing a loss of £8.1m (£1.4m profit).
For the next year he sees sales of £1.19bn then up to £1.27bn in 2023, with a £1.2m profit in 2022 then a £8.6m profit in 2023.
Those estimates would see 0.3p of earnings in the next year, then up to 2.4p per share by 2023.