Morrisons poised to rescue stricken convenience store McColl's

The supermarket and EG Group have both tabled final offers to secure a rescue deal for the convenience store chain, which fell into administration on Friday, plunging the future of its 1,100 shops and 16,000 staff into doubt.

McColl's operates shops across the West Midlands, including six in the Black Country, four in Shropshire, Cannock, Stafford, Sutton Coldfield and Bewdley

Forecourt giant EG – whose owners also run supermarket giant Asda – had been favourites to complete a rescue deal for McColl's.

However, it is understood that both EG and Morrisons tabled late improved offers prior to the administrators' Sunday 6pm deadline for offers and that Morrisons is likely to be chosen.

Morrisons is McColl's key wholesale supplier. It has also formed a tie-up with the chain to convert hundreds of McColl's shops to Morrisons Daily convenience stores. There are already more than 200 operating, and these have been performing well

Trustees for the McColl's pension schemes have called on the Business Secretary Kwasi Kwarteng to do whatever he can to ensure pension scheme members are well protected.

Morrisons' early approaches had reportedly been rejected by lenders who preferred EG's offer to instantly repay more than £160 million in debts from McColl's.

It is believed that Morrisons has now said it will also repay the lenders in cash.

McColl's filed a notice for administration on Friday and is now expected to formally enter administration today before a pre-pack deal is completed.

It is understood that EG group has proposed to retain the retailer's stores and staff, promising to increase the lowest pay rate of McColl's staff to £10.05 an hour.

However, it is predicted that any sale to EG could result in short-term disruption to supply for McColl's stores.

Morrisons and EG Group have declined to comment.