BLACKBURN’S billionaire Issa Brothers are reportedly funding a legal challenge that they hope will help them buy control of Caffe Nero.

EG Group, owned by the brothers, first expressed an interest in the popular coffee outlet earlier this month only to find their offer rejected by founder Jerry Ford, who has instead opted for insolvency.

Though the company has not specifically confirmed the planned legal challenge, it has confirmed that it still believes it would be a suitable owner for Caffè Nero, which has branches in Clitheroe and Preston, and it would continue to pursue new opportunities.

An EG spokesperson said: “We can confirm that EG Group submitted an alternative proposal to the Board of Caffe Nero, having previously made an unsuccessful approach to engage in discussions with the company.

“We regret that Caffe Nero’s creditors did not have an opportunity to consider our proposal fully, as we believe it would have delivered a stronger outcome for all stakeholders, including employees and landlords. 

“Moreover, with our significant global expertise in consumer retail and foodservice, including in the coffee segment, we believe that Caffe Nero would thrive under EG’s ownership. 

“EG Group will continue to look for opportunities to serve communities and customers through expanding our presence in foodservice.”

Now however, trade specialists - from the Retail Gazette to the Sunday Times - are reporting the legal challenge that EG Group is offering to fund will be undertaken by property owners to prevent Caffe Nero’s plan to slash rents on its outlets and have hired law firm CMS and property agents Christie’s and CWM to do so.

The rents are currently set to be slashed as part of a company voluntary arrangement agreed by Caffe Nero as part of its insolvency process.

However, such arrangements are controversial as landlords to the coffee chain’s outlets are set to lose much of their outstanding rent if this were to proceed. 

As such the Issa Brothers hope that their legal challenge will rally landlords to oppose the arrangement, thus derailing Caffe Nero’s insolvency process and as such allowing them to take control of the company. 

This is a tactic that has previously been employed by Sports Direct owner Mike Ashley in a similar bid to take over Debenhams.