Nisa-Costcutter deal collapses

The proposed merger between the two groups, which had been due to go to a Nisa member vote next month, was called off after its financial backer - Icelandic investment bank Kaupthing - insisted on material changes to the deal in the wake of the allegations.

In a statement, Nisa-Today's blamed the cartel claims, made by the rebel Nisa Members Association and subsequently the subject of an Office of Fair Trading investigation, as the principal cause of the deal's collapse.


It said it had been informed the package of banking facilities being put together by the funding banks would only be available if "substantial changes" were made to the terms of the deal including conditions being attached to member payments.


The NMA had alleged that an illegal cartel agreement existed between the two firms, preventing Costcutter retailers from joining Nisa-Today's.


In a separate statement, Costcutter executive chairman Colin Graves said he was "disappointed" to confirm that the merger was no longer progressing.


He said the reason for this was the "uncertainty" created by the allegations that had received "widespread publicity".


The statements come despite an internal investigation, carried out by the Nisa-Today's board, which claimed that no offence had been committed.