Irish drinks group will by wholesale arm but experts say struggling firm not out of the woods yet
Almost 2,000 jobs look set to be saved at Bargain Booze owner Conviviality after an 11th-hour proposal from Magners owner C&C.
Under the deal, the Irish drinks group, which also owns the Bulmers and Tennent’s brands, will acquire Conviviality’s wholesale arm through a pre-pack administration.
This involves a buyer taking over certain assets from a struggling business before it appoints administrators.
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C&C said it plans to buy Conviviality brands Matthew Clark and Bibendum.
Michael Mulligan, a partner and insolvency specialist at law firm, Shakespeare Martineau, said the struggling company was not safe yet.
"Whilst a deal is on the cards, the business is still teetering on the brink of administration," he said.
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“Conviviality’s retail operations, Bargain Booze and Wine Rack, may not be attractive propositions for buyers.
"Consumer spending is dropping and high street retailers are coming under increasing pressure from restrictive rents and rates. There is sure to be some interest, but at what price for unsecured creditors?”
Shares in the company, which are listed on the AIM division of the London Stock Exchange, were suspended last week pending further notice after the firm discovered an unpaid £30m tax bill and issued a series of profit warnings.
The firm supplies more than 700 off-licences and more than 23,000 pubs and restaurants including JD Wetherspoon.
Stephen Glancey, group chief executive of C&C, said: “We know the Matthew Clark and Bibendum businesses very well. They are great businesses with unparalleled on-trade market access, a wide range of supplier relationships and supported by a knowledgeable and loyal employee base.
“The last few weeks have been challenging for employees, customers and suppliers alike. We hope today’s announcement can put an end to this period of disruption and uncertainty. We look forward to working with our new colleagues and other stakeholders to bring stability and restore the group’s position as one of the leading and most respected drinks suppliers to the UK hospitality sector.”