Nisa chairman Peter Hartley wrote to shopkeeper members, telling them that the company wanted to move “as quickly as possible” and has granted Co-op a period of exclusivity.
The talks have been constructive but there are still issues to be resolved, Hartley said.
“During these discussions the Co-op has confirmed, subject to further due diligence, its intention to progress matters as quickly as possible, in the hope that a transaction can be finalised. The Co-op is willing to incur costs on its own account to do this,” Hartley wrote.
“Should an offer of merit emerge from this process, it will be for you, the members, to decide on whether to accept it. However, it is important to stress, that there is no guarantee that an offer will be forthcoming.”
The Co-op, which has previously made an offer for Nisa, has returned with a revised bid of up to £140mln. Its move comes after Sainsbury’s postponed its talks for a proposed £130mln takeover due to competition concerns on 11 August.
Sainsbury's waits for CMA ruling on Tesco's planned Booker merger
The Competition and Markets Authority placed doubts on approval of a possible Sainsbury’s takeover of Nisa after raising worries about a similar merger between Tesco and grocery wholesaler Booker.
The competition watchdog referred Tesco’s planned £3.7bn deal for an in-depth probe in July.
Sainsbury’s said it wanted to wait for CMA’s ruling on the merger between Tesco and Booker before resuming talks with Nisa. Initial findings of the investigation are not expected until October.
Nisa hit by growing competition, loss of McColl's contract
Nisa, which is owned by its members who operate independent shops using the brand, is considering its potential sale as growing competition from the expansion of supermarkets’ local stores has put pressure on traditional convenience stores.
Adding to its woes, its biggest customer, McColl's Retail Group, is retending its £2bn supply deal with the company. McColl's has agreed a £1bn grocery supply tie-up with Morrisons (LON:MRW) that will eventually replace its existing agreements.
A spokesman for The Co-op confirmed its exclusive talks with Nisa, adding that it will provide the opportunity for the company to “carry out more detailed due diligence in the coming weeks”.
“After this period and subject to approval from our board, we hope to be in position where we can put forward an offer to Nisa members.”