LEGAL | Staff Reporter, UK

Billionaire Issa brothers launch takeover bid for Caffe Nero: report

The duo recently bought LEON.

The billionaire brothers who bought Asda for £6.8 billion are said to be making a takeover bid for Caffe Nero after buying up the company’s debt.

The Sunday Telegraph reports that Mohsin and Zuber Issa could be due to take control of the coffee chain after purchasing around £140 million in loans from Swiss private equity firm Partners Group via investment bank Morgan Stanley.

Buying up the debt pile is said to put the Issa brothers, which recently bought LEON, in a strong position for takeover if Caffe Nero defaults on the £145 million of senior ranking debts due to be repaid in 2022.

Sources also told the Sunday Telegraph that Partners Group had written to Caffe Nero boss Gerry Ford over concerns that the company may breach banking covenants.

The bid is the latest in the Issa brothers’ long-running attempt to buy the coffee shop chain. In November, Caffe Nero launched a company voluntary arrangement (CVA) to restructure the firm after a decline in trading due to the pandemic. The Issas submitted a last-minute bid to buy the company, which got rejected. The CVA itself remains subject to a legal challenge.

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