Billionaire brothers mount daring raid on struggling Caffe Nero | Economic news

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The billionaire brothers behind UK gasoline retail powerhouse EG Group launched a bold take-over bid for Caffe Nero hours before the struggling coffeehouse chain sought owners’ approval to lower its bill by rent.

Sky News has learned that Mohsin and Zuber Issa, who turned Lancashire-based EG into one of the UK’s largest privately-owned companies, wrote to Caffe Nero over the weekend to offer to buy the channel from its founder and majority shareholder, Gerry Ford.

Under the EG proposal, Caffe Nero owners would be paid in full for the rent arrears owed to them due to the COVID-19 crisis.

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Mohsin Issa (left) and Zuber Issa consider another takeover

People familiar with the situation said it was a significant improvement for the chain’s store owners over the company’s proposed voluntary agreement (CVA) they are expected to vote on later Monday.

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

EG’s offer could force the coffeehouse chain to postpone the CVA vote, insiders said.

The offer underlines the growing reputation of the Issas as buccaneer entrepreneurs whose relentless pursuit of growth has enabled them to create a group employing more than 44,000 people at 6,000 sites in Europe, the United States and Australia.

In September, the brothers and their private backers, TDR Capital, struck a deal with Walmart buy Asda for £ 6.8 billion.

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The Issa brothers reached a deal to buy Asda in October

As part of the CVA proposal, a number of its 650 Caffe Nero-branded locations could eventually close, although the plan’s goal is to shift to a revenue-based rent model.

The company also operates 150 stores under brands such as Harris & Hoole, which are not part of the CVA.

Caffe Nero lenders are expected to play a role in deciding the chain’s future.

Mezzanine debt providers Alcentra and Partners Group wrote in FTI Consulting for advice, while banks are advised by Deloitte.

The CVA vote, which is set to close Monday evening, is one of many that has drawn the wrath of the British Property Federation, which represents business owners and has accused retailers and restaurant chains of ‘militarizing’ l insolvency tool.

In response, high street actors say their future has been jeopardized by the carnage of the coronavirus pandemic, with tens of thousands of jobs already lost.

Like rivals such as Pret a Manger, Caffè Nero has been strongly impacted by the reduction in traffic to city centers as millions of Britons continue to work from home.

The chain employs more than 5,000 people and claims it serves 135 million customers per year.

EG and Caffe Nero declined to comment.

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