According to published reports, Morrisons is taking its business to Cinram Logistics.
For more information visit: www.mblgroup.co.uk
Unedited press release follows:
MORRISONS CONTRACTS TERMINATION
15 MARCH 2011 — The Board of MBL Group plc (“Board”) announces that it has received formal notification from its major customer, Wm Morrisons Supermarket plc (“Morrisons”), of the termination of its two existing supply agreements with MBL. The final termination date of the agreements will be 14 September 2011. In the financial year ended 31 March 2010, approximately 78% of MBL turnover related to sales to Morrisons.
The notification is a significant disappointment to MBL which has had a successful long-term commercial relationship with Morrisons for 14 years. The Board of MBL had been in negotiations with Morrisons for several months regarding a future commercial relationship but have also been notified that they have been unsuccessful in securing the third party logistics service tender. As previously announced Morrisons had decided to move away from the existing full supply arrangements provided by MBL. The announcement will necessitate a significant downsizing of our operations and with regret the resultant loss of employment for many of our employees. We are commencing discussions with Morrisons and the new service provider regarding those employees who will be in scope for TUPE (Transfer of Undertakings (Protection of Employment) Regulations) at the end of the agreements.
Negotiations are also continuing regarding the stock balances which MBL has purchased in support of the existing agreements and which represent a high proportion of the total stock balances of the Group. The Board will update investors as soon as the financial commitment has been agreed with Morrisons.
The Board is also announcing that KPMG Corporate Finance is to be appointed to seek a suitable purchaser for the Group. As such this may or may not result in an offer for the entire issued share capital of MBL, though there can be no certainty that any offer will be forthcoming. The Board will update shareholders in respect of this process as soon as it is appropriate to do so.
Accordingly, under the rules of the Takeover Code, MBL is now in an offer period. MBL confirms, pursuant to Rule 2.10 of the Takeover Code, that its issued share capital as at 15 March 2011 comprised 17,296,080 ordinary shares of 75 pence each. The shares are traded on AIM under ISIN GB00B0W48T45.
Further to the announcement made on 31 January 2011, the Board would like to confirm that Steven Walsh-Hill will be leaving the business by mutual agreement with immediate effect. This is due to being unable to reach agreement on the terms of Mr Walsh-Hill’s appointment.