Yesterday speculation arose about the fate of the coffee chain, after Sky News broke a story about the brothers intention to take over the brand in a deal that would see that the rent owed to them during the Covid-19 pandemic paid in full.
The approach from the duo is said to have come on the eve the company was set to request approval from landlords to cut its prices in a CVA agreement.
Caffe Nero’s decision to reject the offer from the EG Group brothers, solidifies founder Gerry Ford’s previous statement that a CVA is necessary “to safeguard the future of the business”.
In September 2020, the brothers secured a deal with the backing of TDR Capital to purchase Asda for £6.8bn, protecting the retailer’s workforce.
A spokesperson for Caffe Nero said: “It is the directors view that this party’s clear intention is to disrupt the CVA process currently underway as a precursor to opportunistically acquiring the company at a later date.
“This offer has been made without any understanding of Caffe Nero’s financial and trading position. Furthermore, any transaction would be subject to a period of detailed due diligence, as well as the agreement on the terms of any sale, and would require the consent of the group’s external lenders and shareholders.”
They added: “Therefore, it is unlikely that any transaction will be agreed, resulting in an outcome for creditors that is far inferior to the current CVA proposal. The group’s current CVA proposal to its creditors has been structured to put the group on a sustainable footing for the medium to long term, directly aligning the company’s interests with those of its key stakeholders and landlords in particular.
“Ultimately, it will provide the company with the flexibility required for it to withstand the devastating impact of the current pandemic and any further subsequent lockdowns, and emerge strongly to regain previous trading momentum once restrictions are lifted.”