Bargain Booze owner eyes more than 100 Central Convenience stores
The group is underpinning the deal by raising £30 million on the London Stock Exchange.
Bargain Booze-owner Conviviality is buying more than 100 convenience stores from collapsed wholesaler Palmer & Harvey in a £25 million deal funded by a share placing.
The alcohol wholesaler and distributor has tabled a bid for Central Convenience, which includes franchise rights, 127 convenience stores, 20 linked to petrol stations and 47 including Post Offices, and 18 franchisee operated stores.
The group is underpinning the deal by raising £30 million on the London Stock Exchange by placing 8,000,000 new ordinary shares at 375p each.
Shares in Conviviality rose more than 2% in response to the potential acquisition from P&H subsidiary WS Retail (WSR).
Conviviality chief executive Diana Hunter said: “We are pleased to have finalised terms for a potential acquisition of Central Convenience as it provides a clear opportunity to accelerate the growth and reach of the existing Conviviality Retail business, notably broadening our geographic footprint in the south and south west of England.
“The acquisition, if effected, will support our strategic goal to be the drinks and impulse sector’s leading independent distributor and we believe that potential exists for a range of synergies and increased returns for Conviviality’s shareholders.”
The move comes after a further 400 P&H staff were made redundant on Tuesday after 2,500 people immediately lost their jobs when the troubled wholesaler crashed into administration at the end of last month.
The 90-year-old firm appointed PwC as administrators after “challenging trading conditions” heaped pressure on its cash flow and efforts to revive the business failed to take hold.
P&H was the UK’s biggest supplier of cigarettes, employing about 3,400 people and providing alcohol, groceries and frozen food to 90,000 retail accounts.
WSR booked turnover and earnings of £75.7 million and £3.5 million respectively in the 53 weeks to April 8, Conviviality said.