Nisa shareholders back Co-op takeover

Shareholders in the Nisa convenience store group have approved the chain's £137m takeover by the Co-operative Group.

The deal was backed by 75.79% of shareholders' votes at an emergency meeting, narrowly exceeding the 75% threshold required to approve the deal.

Nisa is a member-owned business that has more than 3,000 stores and operates a wholesale business.

The deal still needs to be approved by the Competition and Markets Authority.

The Nisa board said the deal was in the "best interests" of members.

Nisa chairman Peter Hartley said: "The convenience store environment is changing rapidly, and is unrecognisable from that which existed when Nisa was founded more than 40 years ago.

"Co-op will add buying power and product range to our offering, while respecting our culture of independence."

Under the deal, Nisa members will still have the option of choosing not to buy goods through the Co-op.

Nisa shareholders will receive an equal initial payment of £20,000, plus deferred payments depending on how many shares they hold.

However, there was opposition from some Nisa members who were unhappy about, among other things, the size of the initial payout.

"The threshold was only surpassed by a fraction, showing that there is still a large amount of discontent around the deal," said Molly Johnson-Jones, senior retail analyst at GlobalData.

"Many independent retailers are fearful of what the market consolidation will do to their autonomy, and there was dissidence around the idea of being owned by a large corporation."

The retail industry is undergoing a period of consolidation. A shift in shopping habits, fierce competition from the likes of Aldi and Lidl, and the arrival of Amazon has prompted retailers such as the Co-op to look to bolster their businesses by buying food wholesalers.

Earlier this year Sainsbury's began talks with Nisa about a takeover, before pulling out.

Tesco is awaiting the results of an in-depth competition inquiry into its proposed £3.7bn takeover of wholesale giant Booker, which supplies goods to convenience stores, pubs and restaurants.

Nisa has nearly 1,200 members, who operate more than 3,200 stores among them, some under the Nisa brand and others under their own names.

In the year to 2 April, Nisa reported revenues of £1.25bn. with pre-tax profits of £2.8m.

"Nisa has futureproofed itself for the increasingly competitive and monopolised convenience market," said GlobalData's Ms Johnson-Jones.

"Tesco-Booker will operate at a larger scale than any food retail company in the past, and will fundamentally change the structure of the market.

"It is essential that symbol groups move to acquire greater buying power to avoid being pushed out of the market by the big four [supermarket chains] wielding their new-found convenience and wholesale capabilities.

Nisa would now be in a better position to protect its members, she added. However, she said rising costs and high demand for convenience store spaces mean that "it's not going to be easy to be an independent retailer over the medium term, even with a partnership of this size".