Morrisons ‘in talks to sell M Local chain’

British supermarket chain Morrisons is reportedly in advanced discussions to divest its M local convenience stores to investment firm Greybull Capital.

People familiar with the matter said Morrisons was in exclusive negotiations with an industry group led by Greybull, the turnaround specialist that led the takeover of travel business Monarch Group past year.

A number of parties were rumoured to be interested after Morrisons announced the closure of 23 M Local stores earlier this year.

Morrisons, which had been looking to try and catch up with its UK supermarket rivals in the convenience store sector, has now significantly slowed its M Local rollout and said in May it is reviewing its proposition and site selection criteria.

Greybull is best known for saving Monarch Airlines last year after injecting £125m of funding to keep it flying. It would be one of the first major decisions on restructuring the business taken by new chief executive David Potts.

Morrisons entered the fast-growing convenience market under former boss Dalton Philips, but has struggled to make headway. But chairman Andy Higginson claimed that more than 30% of the stores had not worked.

The stores to be acquired generate close to £350m in sales.