Terms of the scheme of arrangement between convenience chain Oliver’s Real Food and UK business EG Group have required a renegotiation of the business’ partnership moving forward.
EG Group specified that in order for it to acquire all shares in Oliver’s its net indebtedness could not exceed $800,000, and when Oliver’s revealed its net indebtedness was $910,000 in April, EG said it wouldn’t waive the condition – creating doubt as to whether the acquisition would go ahead.
On Monday the two businesses announced they were terminating the scheme of arrangement, but had entered into a secondary agreement to allow EG to utilise the Oliver’s Food to Go branding.
Under the arrangement, EG Group will pay a one off licence fee of $500,000 for the ability to use the trademark and sell its products under a supply arrangement, which Oliver’s will exclusively provide for a period of ten years.
Additionally, EG Group is required to open 100 Oliver’s Food to Go outlets within 12 months of the date of the deed.
“We are delighted to have reached this commercial arrangement with EG,” Oliver’s founder and chairman Jason Gunn said.
“EG recognised in Oliver’s a brand with significant credibility in this market, and we have found in EG a fantastic partner to expand the Oliver’s brand rapidly, on a national scale.”
EG Group previously entered a bidding war with Canadian Touche-Card for Caltex’s convenience store business, but was rejected by the petrol chain.
EG Group’s Australian CEO Mike McManamin said the business had long watched Oliver’s, and that after a successful trial it would spread Oliver’s Food to Go across its network of sites across Australia.