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    TSCO   GB00BLGZ9862

TESCO PLC

(TSCO)
  Report
Delayed London Stock Exchange  -  11:35 2022-12-02 am EST
228.50 GBX   -0.09%
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UK's Morrisons clinches deal for convenience chain McColl's

05/09/2022 | 12:50pm EST
FILE PHOTO: A view of a Morrisons supermarket in Birtley

May 9 (Reuters) - British supermarket group Morrisons has won a battle against the owners of rival Asda to buy collapsed convenience store chain McColl's.

In a deal structured through a so called pre-pack administration, Morrisons, which has a wholesale supply deal with McColl's, will take on all its 1,160 stores, including 270 Morrisons Daily format stores.

Morrisons will also take on all of McColl's workforce of 16,000 and its two pension schemes, which have over 2,000 members.

It said McColl's' secured lenders and preferential creditors would be paid in full with a distribution also expected to unsecured creditors.

McColl's went into administration with debt of just under 170 million pounds ($210 million).

EG Group, the petrol station and food retail business owned by brothers Zuber and Mohsin Issa and private equity group TDR Capital, was set to seize control of McColls after its lenders rejected a rescue deal from Morrisons on Friday. The brothers and TDR also own Asda.

However, over the weekend, Morrisons came back with a fresh proposal.

“Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders," said Morrisons CEO David Potts.

"This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners."

Morrisons, which trails market leader Tesco, Sainsbury's and Asda, has been owned since October by U.S. private equity group Clayton, Dubilier & Rice (CD&R).

McColl's had been in talks with its lenders for weeks to try to resolve its funding woes. Its shareholders had seen the value of their investment virtually wiped out over the last year.

The retailer's stock was suspended from trading on Friday.

The sale to Morrisons was conducted by administrator PriceWaterhouseCoopers.

($1 = 0.8103 pounds) (Reporting by James Davey in London and Muhammed Husain in Bengaluru; Editing by Krishna Chandra Eluri and Bernadette Baum)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
J SAINSBURY PLC 0.86% 223.9 Delayed Quote.-18.82%
MCCOLL'S RETAIL GROUP PLC 46.29% 1.675 Delayed Quote.-97.86%
TESCO PLC -0.09% 228.5 Delayed Quote.-21.18%
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Analyst Recommendations on TESCO PLC
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Financials
Sales 2023 65 344 M 80 041 M 80 041 M
Net income 2023 1 417 M 1 736 M 1 736 M
Net Debt 2023 10 784 M 13 210 M 13 210 M
P/E ratio 2023 11,6x
Yield 2023 4,62%
Capitalization 16 787 M 20 563 M 20 563 M
EV / Sales 2023 0,42x
EV / Sales 2024 0,41x
Nbr of Employees 345 000
Free-Float 98,0%
Chart TESCO PLC
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Technical analysis trends TESCO PLC
Short TermMid-TermLong Term
TrendsBullishNeutralBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 15
Last Close Price 228,50 GBX
Average target price 272,02 GBX
Spread / Average Target 19,0%
EPS Revisions
Managers and Directors
Ken Murphy Group Chief Executive Officer & Director
Imran Nawaz Chief Financial Officer & Director
John Murray Allan Non-Executive Chairman
Guus Dekkers Chief Technology Officer
Byron Elmer Grote Senior Independent Non-Executive Director
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