Six months after its bid to buy Nisa-Today's was rejected, Bibby Line Group has set its sights on Britain's biggest independent convenience store and CTN chain, The Grocer understands.
Bibby, which owns a controlling stake in the 1,600-store Costcutter, has been in talks with Martin McColl for weeks, said a source close to the chain.
"Bibby wants to run it alongside Costcutter, giving it massive buying power and creating a massive retail business with nearly 3,000 stores," said the source. "It would be a force to be reckoned with." Another wholesaler said: "Martin McColl is up for sale, with Bibby the most likely buyer."
If Bibby owned McColl it would be bad news for Palmer & Harvey, which currently distributes for McColl, and sources claim that contract is currently up for renewal.
Wholesalers speculated £200m might be a fair price for the 1,293-store business, based on a multiple of profits in its most recent accounts for the year ending November 2008. After the company's £147m net debt was paid down, that could lead to a £53m payout for its shareholders, which include chairman James Lancaster, MD Stephen Wilkinson and the private equity arm of HBOS, which made an £80m loss in the year to December 2008.
However, Martin McColl has told The Grocer that pre-tax profits rose from £6.1m to £21.5m in 2009. Based on this performance, it may be demanding significantly more money.
Whether Bibby would offer "the right price" remains to be seen. When it tried to buy Nisa last year, its second bid, which valued it at £134m, was rejected outright by the board because it represented a "significant undervaluation".
Costcutter is Nisa's biggest member, accounting for more than 40% of its volume, and is tied into a contract with the buying group until 2014, after which it could take its business elsewhere.
"It has long been known that senior management at Martin McColl would sell for the right price," said one industry source. "All eyes will be on Bibby to see what they offer."
Bibby, which owns a controlling stake in the 1,600-store Costcutter, has been in talks with Martin McColl for weeks, said a source close to the chain.
"Bibby wants to run it alongside Costcutter, giving it massive buying power and creating a massive retail business with nearly 3,000 stores," said the source. "It would be a force to be reckoned with." Another wholesaler said: "Martin McColl is up for sale, with Bibby the most likely buyer."
If Bibby owned McColl it would be bad news for Palmer & Harvey, which currently distributes for McColl, and sources claim that contract is currently up for renewal.
Wholesalers speculated £200m might be a fair price for the 1,293-store business, based on a multiple of profits in its most recent accounts for the year ending November 2008. After the company's £147m net debt was paid down, that could lead to a £53m payout for its shareholders, which include chairman James Lancaster, MD Stephen Wilkinson and the private equity arm of HBOS, which made an £80m loss in the year to December 2008.
However, Martin McColl has told The Grocer that pre-tax profits rose from £6.1m to £21.5m in 2009. Based on this performance, it may be demanding significantly more money.
Whether Bibby would offer "the right price" remains to be seen. When it tried to buy Nisa last year, its second bid, which valued it at £134m, was rejected outright by the board because it represented a "significant undervaluation".
Costcutter is Nisa's biggest member, accounting for more than 40% of its volume, and is tied into a contract with the buying group until 2014, after which it could take its business elsewhere.
"It has long been known that senior management at Martin McColl would sell for the right price," said one industry source. "All eyes will be on Bibby to see what they offer."
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