The billionaire Issa brothers are said to be preparing to launch a takeover bid for Caffe Nero, having just announced they have bought restaurant chain Leon for £100 milion.

Mohsin Issa, 49, and Zuber Issa, 48, are entrepreneurs from Blackburn who founded petrol forecourt business EG Group.

They have been looking to purchase Caffe Nero for some time, as they made a bid to buy it last November when the coffee chain put itself into a Company Voluntary Arrangement, which is a formal insolvency procedure allowing struggling companies to pay off their debts over a fixed period of time.

The buyout deal was rejected, but the brothers are reportedly getting ready to try again.

Like other coffee chains, Caffe Nero has been hit by the coronavirus pandemic, which has seen office workers leave city centres to work from home instead, resulting in reduced footfall.



The Telegraph reports that the Issa brothers are understood to have bought around £140 million of the coffee chain’s debts from Partners Group via investment bank Morgan Stanley.

The paper said that this would leave them in a ‘strong position’ to take over Caffe Nero if the chain defaulted on its borrowing.

They cited city sources who claimed that Partners had written to Gerry Ford, the CEO of Caffe Nero, on Friday to raise concerns about how the company could refinance £145 million of debts due to be repaid next year.

The Issa brothers were recently honoured in the Queen’s Birthday Honours List 2020, for their contribution to business and charity and made CBEs.

They built EG Group from a single petrol station bought for £150,000 in 2001 after growing up in a terraced house in Blackburn where their parents lived after moving to the UK from India.

The group, which runs Euro Garages, now employs around 44,000 staff and is worth around £9 billion.

As well as recently buying Leon, the brothers have also bought Asda supermarket from former owners Walmart.

A spokesperson for Caffe Nero said: ‘We have had a successful winter and spring trading and are generating positive cash flow and are ahead of forecast for the last five months.

‘We are forecasting no covenant issues in our projections over the next 12 months and we look forward to an even brighter future post May 17 when we open up our cafes fully to the public.’

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