The billionaire owners of petrol station operator EG Group have launched a bid for struggling coffee chain Caffe Nero, reports claim.
Sky News reported on Monday that Mohsin and Zuber Issa wrote to the Caffe Nero owner and founder Gerry Ford over the weekend with a takeover proposal.
The chain's landlords are set to vote shortly on a company voluntary arrangement (CVA) restructuring model, which would allow Caffe Nero - which has around 800 stores across the UK and employs around 6,000 people - to seek rent cuts, changes to leases, and store closures.
The chain has proposed landlords receive 30p for every £1 of rent they are owed, and is seeking to move most stores to a turnover-rent based model. If there are any closures these are expected to be minimal.
Sky reported that EG Group's proposal stated that if the brothers took over, the chain’s landlords would be paid in full, in cash, for Covid rent arrears.
A Caffè Nero spokesman said earlier this month: "Our CVA is one of the most generous on the market, and we are committed to working with our landlords to find a solution as we fight through these unprecedented times.
"Our trading has been decimated throughout this period and a CVA is our only option."
Caffe Nero is one of many High Street firms currently seeking CVAs as a result of plunging demand due to the pandemic, and landlords have responded with frustration.
Melanie Leech, chief executive of the British Property Federation, has said that CVAs “are not the solution” to the “mountain of accrued rent arrears across the commercial property sector growing at the rate of £1.5 billion a quarter”.
The reports come just weeks after the Issa brothers and their private equity backers, TDR Capital, landed an agreement to buy Britain's third-largest supermarket, Asda, for £6.8 billion from Walmart.
The brothers have grown the Lancashire-based EG Group into a huge private company with a network of around 6,000 petrol forecourts around the world.
The Standard has contacted Caffe Nero and EG Group for comment.