Tesco stunned the convenience store sector with a £53.7m offer for upmarket London chain Adminstore this week.
Tesco corporate affairs director Lucy Neville-Rolfe said that the multiple had been negotiating with the owners of the Adminstore chain, ranked number nine in The Grocer’s Top 50 independent retailers, “for some time”.
The purchase of 45 of the family’s stores would complement Tesco’s estate in London where it was “under-represented” she said.
She added Tesco did not anticipate the swoop on the £72.8m turnover business would raise any competition issues.
Tesco had only a 6% share of the convenience market and the latest deal was “only 45 stores out of 54,000 convenience stores in the UK”, she said.
If the deal gets regulatory and shareholder clearance, Tesco will start conversions in April or May. The 15 Europa Foods stores, eight Harts the Grocer, 11 Cullens stores, three Crispins and seven additional stores under different fascias would be converted by mid-2005. During the handover, stores would be run under their existing fascias, with no Tesco branded products on sale. Converted stores would carry the Express range including a full range of Finest lines to reflect demand in the affluent neighbourhoods they served. “These will be very good Express stores,” predicted Neville-Rolfe.
The new acquisitions would be managed as part of Tesco’s Express convenience portfolio of 230 stores, which include 112 Esso petrol station sites and 104 sites acquired from T& S last year.
The offer on Adminstore comes a year after Tesco got the go ahead from the DTI for its controversial takeover of nearly 900 T& S One Stop c-stores, as well as a rump of T&S’s Supercigs and Dillons CTN stores. A purchase of the batch of 45 prime stores would speed Tesco towards a target of 1,000 Express stores nationwide by 2007, including 450 former T&S Stores.
Last week it raised around £775m through a share issue in a City fund-raising drive, partly to pay for a roll out of the Express format. It is also planning to advertise in the national press for suitable sites as it grows the Express portfolio organically.
Under the terms of the deal Adminstore’s current owners will retain a number of c-stores, which will become a separate business. Tesco is still negotiating with them over whether they can retain the rights to the various fascias after Tesco has converted the stores it is buying to the Express fascia.
Anne Bruce
Tesco corporate affairs director Lucy Neville-Rolfe said that the multiple had been negotiating with the owners of the Adminstore chain, ranked number nine in The Grocer’s Top 50 independent retailers, “for some time”.
The purchase of 45 of the family’s stores would complement Tesco’s estate in London where it was “under-represented” she said.
She added Tesco did not anticipate the swoop on the £72.8m turnover business would raise any competition issues.
Tesco had only a 6% share of the convenience market and the latest deal was “only 45 stores out of 54,000 convenience stores in the UK”, she said.
If the deal gets regulatory and shareholder clearance, Tesco will start conversions in April or May. The 15 Europa Foods stores, eight Harts the Grocer, 11 Cullens stores, three Crispins and seven additional stores under different fascias would be converted by mid-2005. During the handover, stores would be run under their existing fascias, with no Tesco branded products on sale. Converted stores would carry the Express range including a full range of Finest lines to reflect demand in the affluent neighbourhoods they served. “These will be very good Express stores,” predicted Neville-Rolfe.
The new acquisitions would be managed as part of Tesco’s Express convenience portfolio of 230 stores, which include 112 Esso petrol station sites and 104 sites acquired from T& S last year.
The offer on Adminstore comes a year after Tesco got the go ahead from the DTI for its controversial takeover of nearly 900 T& S One Stop c-stores, as well as a rump of T&S’s Supercigs and Dillons CTN stores. A purchase of the batch of 45 prime stores would speed Tesco towards a target of 1,000 Express stores nationwide by 2007, including 450 former T&S Stores.
Last week it raised around £775m through a share issue in a City fund-raising drive, partly to pay for a roll out of the Express format. It is also planning to advertise in the national press for suitable sites as it grows the Express portfolio organically.
Under the terms of the deal Adminstore’s current owners will retain a number of c-stores, which will become a separate business. Tesco is still negotiating with them over whether they can retain the rights to the various fascias after Tesco has converted the stores it is buying to the Express fascia.
Anne Bruce
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