Connect with us

Hi, what are you looking for?

Investing

Billionaire Issa brothers who bought Asda for £7bn launch takeover bid for Caffe Nero’ – hours after agreeing £100m to buy restaurant chain Leon

issa brothers

The billionaire Issa brothers who recently bought Asda for £6.8billion are poised to make a takeover bid for struggling Caffe Nero after buying up the company’s debt.

Mohsin, 49, and Zuber Issa, 48, could be due to take control of the coffee chain after purchasing around £140million in loans from Swiss private equity firm Partners Group via investment bank Morgan Stanley, the Sunday Telegraph reports.

Buying up the debt pile puts the Issa brothers in a strong position for takeover if Caffe Nero defaults on the £145million of senior ranking debts due to be repaid in 2022.

City sources told the Sunday Telegraph that Partners Group had written to Caffe Nero’s boss Gerry Ford, 62, on Friday over concerns that the company may breach banking covenants – the restrictions laid out in a lending agreement.

The Issa brothers, who purchased fast-food chain Leon for between £80million and £100million in the early hours of yesterday, have been in a long-running battle to buy the Caffè Nero coffee shop chain.

Leon
Leon healthy fast food restaurant in the City of London

Leon is the latest acquisition in a buying spree that has seen the brothers hoover up petrol forecourt and roadside service chains around the world and even consider buying Topshop.

The brothers, whose parents came to Britain from India ‘with nothing’, built EG Group from one petrol station bought for £150,000 in 2001 into a £9billion giant employing 44,000 staff.

The pair are now worth an estimated £3.56bn, including a £25m Kensington townhouse and a private jet that is kept in a hangar at Blackpool Airport alongside Donald Trump’s personal helicopter.

Caffe Nero, like its rivals such as Pret a Manger, has been heavily impacted by the reduced footfall in city centres as millions of Britons work from home.

Cafe Nero

In November Caffe Nero was forced to put itself into a Company Voluntary Arrangement, a type of insolvency that allows firms to continue trading while they attempt to get their finances in order.

Just hours before Caffe Nero’s creditors and landlords were set to vote on the company’s insolvency plan the billionaire Issa brothers made a bid to take over the coffee chain, Sky News reported. The buyout deal was rejected.

Founder Mr Ford, who set up the business in 1997, said the second lockdown had pushed the company to act as he appointed leading accountants KPMG to advise on the CVA last year.

Mr Ford said in November: ‘Like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action.’

The chain has suffered from curbs on socialising, fewer shoppers in town centres and the government advice for workers to stay away from their offices.

The company operate 800 stores across the UK and employ more than 6,000 people.

Caffe Nero is said to have been performing strongly prior to the pandemic.

A spokesman for Caffe Nero said: ‘We have had a successful winter and spring trading and are generating positive cash flow and are ahead of forecast for the last five months.

‘We are forecasting no covenant issues in our projections over the next 12 months and we look forward to an even brighter future post May 17th when we open up our cafes fully to the public.’

A spokesman for the EG Group would not confirm if Morgan Stanley was acting on behalf of Mohsin and Zuber Issa by becoming assigned Cafe Nero’s debt in a sub-participation from Partner Group.

Read more:
Billionaire Issa brothers who bought Asda for £7bn launch takeover bid for Caffe Nero’ – hours after agreeing £100m to buy restaurant chain Leon

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

Virgin Orbit’s next satellite launch will take place from the UK, following the success of the “Straight Up” mission, which lifted off from Mojave...

Investing

Post Office collection and cash delivery workers are to stage a one-day strike later this month in a dispute over pay. Members of the...

Investing

UK consumers cut back on credit card borrowing in May amid fears over rising interest rates and a slowing economy driven by a cost...

Investing

London City airport is seeking to overturn its Saturday flight ban and raise by 40% the limit on its passenger numbers. A local residents’...

Investing

The bank said that it was introducing a £1,200-a-year pay increase from August 1, which would start to show in next month’s pay packets....

Investing

Postmasters caught up in the Horizon IT scandal say that they are still being “left in the dark” about a compensation package after the...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.