Earlier this year, British fuel and convenience conglomerate EG Group offered to buy roadside restaurant chain Oliver's Real Food (ASX: OLI) for $25 million.
While Oliver's debt of $910,000 made it an unfit takeover target for EG, it didn't stop the two companies from striking a different bargain.
Today, the original scheme has been scrapped in place of a partnership.
Under the new long-term supply agreement between the two companies, Oliver's will supply EG's Australian petrol and convenience outlets on an exclusive basis under the brand 'Oliver's Food To Go' (OFTG).
EG will need to open a minimum of 100 OFTG outlets within 12 months of the date of the deed to meet its obligations.
Oliver's will retain ownership of all its intellectual property, as well as any improvements or goodwill that stems from the use of its IP.
EG bought the Woolworths fuel business for $1.72 billion in April last year - a network of more than 540 service stations Australia-wide.
Oliver's founder and chairman Jason Gunn says the agreement is a coup, given its new position within the impressive national network.
"We are delighted to have reached this commercial arrangement with EG," says Gunn.
"EG recognised in Oliver's a brand with significant credibility in this market, and we have found in EG a fantastic partner to expand the Oliver's brand rapidly, on a national scale."
Shares have risen 37 per cent on the news to reach $0.056 each by 2:10pm AEST.
The agreement will run for 10 years with an option to extend for a further 10 years after the initial term ends.
When EG Group first offered to buy Oliver's in March this year, it marked the 12-month anniversary Jason Gunn's return to the top job.
Following Gunn's return, and in despite of a horrendous bushfire season, Oliver's realised a $10 million year-on-year increase to its bottom line in the first half of FY20.
EG Group owns and operates more than 6,000 convenience, fuel and fast food sites worldwide under brands including Spar, Starbucks, Burger King and Subway. It manages more than 1,500 food and drink-to-go units globally.
The British group entered the Australian petrol retail market in 2018 with the purchase of 540 fuel convenience sites from Woolworths Group (ASX: WOW) for $1.73 billion.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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