One of the UK’s largest suppliers of agricultural goods is being looked at by potential suitors after entering into administration last week.
Directors for Countrywide Farmers, which employs more than 700 staff across 48 stores, said the company faced “an uncertain future” after plans to sell announced a year ago collapsed earlier this month.
As part of the restructuring process initiated over the past 12 months, the group had managed to offload its Liquefied Petroleum Gas unit to DCC Flogas, allowing for the transfer of 60 employees.
But the purchase of its much bigger retail arm by Mole Valley Farmers stalled after the Competition and Markets Authority announced it would need to carry out a months-long investigation into the merger, on the grounds that the transaction could hurt customers by reducing competition. Pressured with cash, Countrywide Farmers said it could not afford to wait that long.
Farmer-owned Mole Valley, which had revenues of £464 million ($651 million; €527 million) last year, offers in-store products and also sells direct and in bulk to farmer customers, with 10 of their 55 stores solely focused on the latter.
KPMG, which is presiding over the administration, told Agri Investor it had received “varied expressions of interest” since last week.
“The joint administrators are in the process of compiling information about the company, and this includes the directors providing a statement of the company’s affairs. This will be provided to creditors with the administrators’ proposals within eight weeks,” it added.
In addition to the blocked merger, difficult trading conditions and stock availability were among the factors that pushed the company into administration, KPMG said. “Many retailers are facing a difficult time with current market conditions.”
Countrywide Farmers had hoped it could convince the CMA that its business was different enough from that of Mole Valley to permit a sale. But the regulator ruled that “it is or may be the case that this merger may be expected to result in a substantial lessening of competition within a market or markets in the UK.”