THE ISSA brothers’ attempted takeover of Caffè Nero is reportedly hanging in the balance with their legal challenge against the coffee chain faltering.

Blackburn-based EG Group founders Mohsin and Zuber Issa had been allied with Apprentice star Lord Sugar in their attempts to purchase the chain, which has branches in Clitheroe and Preston.

However, Caffé Nero’s owners have repeatedly rejected the brothers’ approaches, opting instead for a voluntary insolvency arrangement that would have seen their rents slashed, which the Issas backed the outlets' landlords to challenge in the courts.

Speaking when the Issas first launched their challenge earlier this year, a Caffè Nero spokesperson said: “We intend to defend the challenge vigorously.

“In the meantime, we remain focused on managing the business through the current Covid-19 enforced trading restrictions and re-growing our sales in the months and years ahead.”

EG Group founders Mohsin and Zuber Issa first expressed an interest in the popular coffee outlet, which employs around 5,000 people across the UK, late last year only to find their offer rejected by founder Jerry Ford, who instead opted for insolvency.

Under the current insolvency plans, Caffè Nero rents are set to be slashed as part of a company voluntary arrangement agreed during the company’s insolvency process.

However, such arrangements are controversial as Caffè Nero landlords are set to lose much of their outstanding rent if this were to proceed.

In response the Issa Brothers funded an attempt the landlords to block the coffee chain’s insolvency arrangements and succeeded in winning the support of Lord Sugar’s company Amsprop.

However, according to reports in The Times this week, all but one of the coffee company’s landlords have now pulled out of the challenge after being offered improved terms.

This has left a successful takeover by the brothers unlikely, with the insolvency process now more likely to proceed.

However, they still have a chance to takeover the company with, a source in The Times claims, a sole legal challenger remaining who could yet derail the administration process.

The Issa brothers’ representatives have declined to comment but have said in the past that they believe Caffé Nero would be an ‘ideal partner’ for them.