EG Group eyes up Caffe Nero - report

The British billionaire brothers behind the £6.8bn takeover of supermarket chain Asda are poised to swoop on coffee chain Caffe Nero, it was reported on Monday.

According to Sky News, Mohsin and Zuber Issa’s EG Group wrote to Gerry Ford, the founder and controlling shareholder of the struggling chain, over the weekend.

Under their proposal, rent arrears accrued by Caffe Nero during the pandemic would be repaid to landlords in full, Sky reported. No further details are known, and both EG and Caffe Nero have so far declined to comment.

The news comes as Caffe Nero’s creditors and landlords prepare to vote on insolvency plans. Earlier this month, the chain – which faltered as lockdown measures kept people away from city centres and transport hubs – entered a company voluntary arrangement (CVA), and is now looking to renegotiate rent agreements and cut costs.

KPMG is advising Caffe Nero on the CVA, which requires the backing of creditors and landlords. Caffe Nero employs around 5,000 people and has 650-branded sites.

In September, EG Group – which operates petrol stations across the UK – and private equity firm TDR Capital struck a £6.8bn deal with US retail giant Walmart to acquire Asda.