EG Group eyes bid for Caffe Nero

EG Group, the petrol forecourt and fast food operator, is eyeing a takeover bid for Caffe Nero, Sky News reports.

Mohsin and Zuber Issa, who have turned Lancashire-based EG into one of the UK’s biggest private companies, wrote to Caffe Nero over the weekend to propose buying the chain from its founder and controlling shareholder, Gerry Ford.

Under the proposal, Caffe Nero’s landlords would be paid in full for the rent arrears owed to them as a result of the coronavirus crisis.

Sources told Sky the offer represented a significant improvement over the company voluntary arrangement (CVA) proposal on which they are scheduled to vote later on Monday.

It was unclear whether Caffe Nero had responded to the EG offer yet, or what the precise terms of the offer were.

EG’s bid could force the coffee shop chain to postpone the CVA vote, insiders said.

The Issas have been described as buccaneering entrepreneurs who employ more than 44,000 people across 6000 sites in Europe, the US and Australia.

In September, the brothers and their private equity backers, TDR Capital, secured an agreement with Walmart to buy Asda for £6.8bn.

Under Nero’s CVA proposal, a number of its 650 cafes could close, with an aim to switch to a turnover rent model.

The company also operates 150 sites under brands Coffee#1 and Harris & Hoole, which are not part of the CVA.

EG and Caffe Nero declined to comment.