Reports suggest that Molson Coors is in talks with Conviviality

According to The Times, American brewing giant Molson Coors is understood to be in talks with Conviviality’s administrators, while investors in the UK wholesaler are allegedly considering legal action against the company’s board, claiming they were misled over the health of its finances.

The owner of Carling, Coors Light and Cobra beer brands is allegedly in talks to buy all or part of Conviviality Retail, according to an article published in The Times at the weekend.

The paper also reported that C&C Group, the owners of Magners Cider and Tennent’s Lager, is also in discussion with the company.

In addition, The Times also stated that other companies expressing an interest in Conviviality include the world’s biggest brewer AB InBev and private equity firm Endless, which is allegedly working with Steve Thomson, the former managing director of Matthew Clark, itself under the Conviviality umbrella.

Conviviality has not confirmed that it has appointed administrators, but on 29 March, it did file notice of its intention to do so within 10 business days “unless circumstances change”. It has not said whether this has yet happened.

In an article published today, The Times also stated that investors in Conviviality are considering legal action against the drinks company’s board after claims that they were misled over the health of the wholesaler’s finances.

According to the paper, a particular bone of contention is Conviviality’s decision to raise £30 million to fund its acquisition of 127 Central Convenience stores in December 2017. It placed 8,000,000 new ordinary shares on the market at a price of 375 pence to raise the amount.

It is claimed that investors are questioning when exactly Conviviality’s board became aware of its financial problems.

Conviviality issued its first profit warning on 8 March in which it declared that a “material error” in its financial forecasts had meant that its profit would be £5.2 million less than expected.

This was followed by an update on 14 March in which it added that it was facing a £30 million tax bill and had suspended trading in its shares.

On 21 March, it announced it would be attempting to raise £125m to pay off debts and continue trading, but on 28 March, Conviviality reported that it had failed to reach this equity target. 

It suggested parts of the business may now have to be sold off, and on 29 March, filed notice of its intention to appoint administrators within 10 business days “unless circumstances change”.

Both the C&C Group and Molson Coors have declined to comment on the reports.