Conviviality Retail sold for £7.25m

9th April, 2018 by Melita Kiely

Conviviality has sold the retail arm of its business, which includes Bargain Booze, to Bestway Direct Limited for £7.25 million (US$10.23m).

Bargain-Booze-Conviviality

Conviviality Retail, which includes Bargain Booze, has been sold for £7.25m

Late on Friday (6 April), Matthew Callaghan, Ian Green and David Baxendale of PricewaterhouseCoopers LLP were appointed as joint administrators of Wine Rack Limited and Conviviailty Logistics Limited, as well as Bargain Booze Limited.

Conviviality confirmed the sale of Conviviality Retail to Bestway Direct – one of the UK’s biggest food wholesalers and owner of the Well Pharmacy chain – this morning (9 April).

The sale ensures continued employment for approximately 2,300 staff across the Conviviality Retail business, as well as ongoing trade for suppliers and franchisees, the group said in a statement.

However, it is thought that the sale will not be sufficient enough to provide any financial return to shareholders.

Conviviality also said in its statement: “The board consider that the offer from Bestway represents the best outcome for franchisees, suppliers, customers and employees of the Conviviality Retail business.

“It is with regret that the board notes that the companies are not expected to have sufficient assets to satisfy all their liabilities.

“PricewaterhouseCoopers will be in contact with creditors of Wine Rack Limited, Bargain Booze Limited and Conviviality Retail Logistics Limited.  The board also understand that the realisations will be insufficient to provide any return to shareholders.

“The board wish to thank its franchisees, customers, suppliers, employees and banking syndicate for their continued support during this difficult period.”

On 4 April last week, C&C Group, with financial backing from AB InBev, announced its acquisition of the Conviviality Direct business, which included the Matthew Clark and Bibendum distribution and wholesale arms.

Magners cider maker C&C Group agreed to pay £102m to Conviviality’s lenders over the course of 12 months. Conviviality Direct has been renamed Matthew Clark Bibendum.

The buyout ensured the continued employment of 1,900 staff, continued supply for customers and allowed all trade creditors for Conviviality Direct to be “paid in full”.

UK wholesaler and distributor Conviviality suspended trading its shares on AIM, a sub-market of the London Stock Exchange, in March after identifying a £30m tax bill. The company issued three profit warnings in just one month.

CEO Diana Hunter resigned with immediate effect as Conviviality endeavoured to raise £125m to keep the company afloat, but was unsuccessful in sourcing the funds. David Adams, non-executive chairman of Conviviality, stepped into the role of executive chairman until further notice.

One Response to “Conviviality Retail sold for £7.25m”

  1. Walter says:

    Management certainly took shareholders for a rollercoaster ride! I guess the analogy “What goes up, must eventually come down!” Or, in Conviviality’s case comes crashing down.
    The strategy was flawed from the start as mountains of debt reduced equity to £7.25m from their IPO debut of £67m. What a joke!

Leave a Reply