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Weekend reports have suggested Sainsbury’s (SBRY) has entered into exclusive talks to buy convenience chain Nisa.

The Guardian reported on Saturday that Sainsbury’s was “closing in on a £130m deal” to buy Nisa after being driven to respond to Tesco’s (TSCO) £3.7bn acquisition of Booker (BOK).

News broke at the start of last week that Nisa hired bankers Lazard to advise on its strategic options following the Booker deal.

The Financial Times has reported that Sainsbury’s has entered into exclusive discussions to tie-up a deal for Nisa.

It said Nisa considered offers from multiple bidders – including The Co-op– but that Sainsbury’s offer was superior to that of the Co-op’s.

Sainsbury’s will now conduct due diligence before making a formal offer for Nisa.

The FT says more than 50% of the group’s 1,300 members, who run 3,000 convenience stores, have to accept the offer for it to proceed.

The Guardian warns the decision to sell up is likely to cause controversy among Nisa’s members, because its raison d’etre is to help them compete with supermarket giants such as Sainsbury’s.

See The Grocer’s analysis of the Nisa sales process here.

Morning update

There’s plenty of big news in the sector – after Friday’s shock news that Amazon is buying Whole Foods Market and weekend reports of an imminent sale of Nisa to Sainsbury’s – but there is no grocery/fmcg market news of note released this morning.

The Co-op Bank has announced it is in “advanced discussions” with a group of existing investors “with a view to a prospective equity capital raise and liability management exercise”.

The bank said its formal sale process was continuing. ”The Bank continues to fully discuss both the sale process and the capital raise options with the Prudential Regulation Authority (PRA), which has welcomed the sale and capital raise process.”

In wider economic news the monumental task of negotiating the UK’s exit from the EU begins in earnest today as day one of the negotiations kick off at 11am this morning at European Commission buildings in Brussels.

On the markets this morning, the FTSE 100 has opened up 0.8% to 7,521.3pts.

Sainsbury’s is up 1.1% to 255p after this weekend’s news of its Nisa approach and many of the other retail names that lost ground on Friday after news of Amazon’s Whole Foods deal broke have bounced back.

Ocado (OCDO) has started the day up 6.6% to 294.1p, Marks & Spencer (MKS), is up 1.9% to 351.6p, B&M European Value Retail (BME), is up 1.6% to 345.5p and Associated British Foods (ABF) is up 1.2% to 2,995p.

Other risers include Hilton Food Group (HFG), up 3.2% to 749.5p, McBride (MCB), up 1.9% to 193p, Diageo (DGE), up 1.4% to 2,374p and PZ Cussons (PZC), up 1.3% to 341.4p.

Early fallers include Total Produce (TOT), down 6.8% to 174.8p, Stock Spirits Group (STCK), down 3.1% to 174.8p and Nichols (NICL), down 2.6% to 1,751.6p.

As we head into the start of Brexit negotiations this morning, the pound has edged up to $1.2798 against the dollar.

The week in the City

It’s a quiet week ahead in terms of grocery and fmcg trading announcements.

The only UK announcement of note in the diary is a trading update from Costa Coffee owner Whitbread (WTB) on Wednesday ahead of its AGM.

Tuesday brings the annual general meeting of Coca-Cola HBC (CCH).

In economic news the CBI’s industrial trends surveys are released this week, starting today, while public sector net borrowing figures are released by the UK government tomorrow morning.

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