Mon 30th Nov 2020 - Caffe Nero – offer ‘aims to disrupt CVA process and is precursor to opportunistically acquiring company’ Caffe Nero – offer ‘aims to disrupt CVA process and is precursor to opportunistically acquiring company’: Caffe Nero has confirmed it has received an offer for the business but believes the party’s clear intention is to “disrupt the company voluntary process (CVA) that is under way as a precursor to opportunistically acquiring the company at a later date”. Sky News reported earlier today (Monday, 30 November) the billionaire brothers behind the British petrol retailing company EG Group – Mohsin and Zuber Issa – have launched a takeover bid. Caffe Nero stated: “Following today’s press speculation, without any prior approach to, or engagement with the group, Caffe Nero’s advisers received an unsolicited non-binding offer for the shares of The Nero Group (an indirect holding company of the company) from a third party late last night. It is the directors’ view this party’s clear intention is to disrupt the CVA process currently under way as a precursor to opportunistically acquiring the company at a later date. The highly conditional proposal purports to provide for payment in full of landlord rent arrears but otherwise the terms of the CVA would remain as originally proposed. The directors are fully aware of their responsibility to maximise recovery to creditors. Having considered carefully whether progressing with this unsolicited, highly uncertain approach has the potential to achieve a better result for creditors than the CVA as currently proposed, they do not believe this to be the case or to be in the long-term interests of the group. 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. 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. Importantly, the group’s external lenders have indicated their support for the CVA process. The lenders are aware of the approach referred to above and have not requested a change in strategy, and shareholders have undertaken to reject the offer. The directors have carefully considered this development and their duties and, in particular, the risk and cost implications of any adjournment and the uncertainty associated with any alternative potential transaction and, in the circumstances, consider it is appropriate for the CVA to proceed on its present timetable. Critically, the board has committed to modify the CVA proposal so in the event of a sale of the group to this third party within the next six months, compromised landlords will have their arrears as of today’s date paid in full.”