Howard Holdings, a Cork-based property development and investment company, is set to take control of Kwik Save, a troubled supermarket chain in the UK in a deal worth more than £200 million (€303 million).
It is understood that the company, backed by Cavan-based millionaire businessman Brendan Murtagh, has agreed a deal to buy Kwik Save's retail business and properties. Howard Holdings is already involved in €4 billion worth of developments in Ireland, the UK and continental Europe.
Kwik Save confirmed that a "substantial investment agreement" had been signed but declined to confirm the identity of the group.
It said the investment would involve a group taking a majority stake in Kwik Save and appointing a new chairman and chief executive. The company has had three chief executives in the past 12 months.
"The investment is intended to be completed by February 16th," Kwik Save added.
Howard Holdings confirmed that it was in talks with Kwik Save on a deal but declined to comment further.
It is understood that Howard Holdings sees potential both in reviving the ailing retail business and developing Kwik Save's property assets. A substantial number of its 220 stores are owned by the retailer. It is not clear how much cash will change hands. Kwik Save is thought to have substantial debts, which could form part of the value of the deal.
Talks are believed to have begun before Christmas.
Kwik Save employs about 3,800 people in England, Scotland and Wales. The company does not reveal any financial information but it was reported to be losing £1 million a week at the time of its £200 million sale in February 2006 by Somerfield to a consortium called Back To The Future.
Howard Holdings, which was delisted from the London stock market in 2002, already has retail interests in the UK. The company owns the Whitgift shopping centre in Croydon, which covers over 92,900sq m (one million sq ft) of retail space. Sitting on 11 acres, the site is believed to have significant development potential. It was acquired in a joint venture with Anglo Irish Bank and is one of the UK's top 10 shopping centres.
The company is also developing a shopping centre in Rome. It owns Coventry airport and is developing a €360 million hotel, golf and villas complex in Majorca. The company also has three projects under way in Poland.
Although it is headquartered in Ireland, Howard Holdings is a UK-registered company. Frank Gormley, one of its founders and a 30 per cent shareholder, split from the company last September taking certain assets with him and forming a new company called Howard Eurocape.
Mr Murtagh, a director of successful building materials group Kingspan and the majority shareholder in loss-making broadband provider Smart Telecom, is thought to own more than 40 per cent of Howard Holdings's equity.
