McColl's picking up almost 300 Co-op stores

The consumer co-operative confirmed around 3,800 employees will also transfer as part of the deal.

A total of 298 stores are involved in the transaction, with an average store size of 1,727 square feet and average weekly sales per store of £22,800 in 2015.

“The Co-op Food business continues to move forward with a clear momentum and purpose to deliver a compelling and convenient shopping experience for our millions of customers and members,” said chief executive Steve Murrells.

“Today's announcement is completely in line with our strategy, as these stores did not allow us to provide a sufficiently compelling own-brand offer for our members going forwards.

“The proceeds will be reinvested to drive sustainable growth for our members and I'm delighted that all 3,808 colleagues will transfer to McColl's on the same terms and conditions,” Murrells added.

McColl’s is expected to take possession of the first batch of stores in January, with the portfolio being gradually acquired in batches of up to 20 stores per week.

It will fund the acquisition through a placing of 10.4 million shares to new and existing investors, to raise around £13.1m before expenses.

“I am delighted to announce the acquisition of 298 quality convenience stores in a transformational deal for McColl's,” said chief executive of the London-listed company Jonathan Miller.

“This opportunity substantially accelerates our growth strategy and expands our neighbourhood presence for the benefit of our customers.”

Miller said the stores are profitable, well-invested and the perfect size for their operating model, with the board expecting the transaction to be significantly earnings-enhancing for their shareholders.

“I look forward to welcoming all of our new colleagues to the business.”