- Home entertainment products distributor MBL Group plc has put itself up for sale after losing contracts with Morrisons that accounted for around 78% of its turnover.

MBL announced it had received formal notification from the supermarket group terminating its two existing supply agreements. The final termination date will be September 14.

The company said, 'The notification is a significant disappointment to MBL, which has had a successful long-term commercial relationship with Morrisons for 14 years.'

MBL had been in negotiations with Morrisons for several months regarding a future commercial relationship but had also been notified that it had been unsuccessful in securing the third-party logistics service tender.

As previously announced, Morrisons had decided to move away from the existing full-supply arrangements provided by MBL.

The result would be 'a significant downsizing of our operations and with regret the resultant loss of employment for many of our employees'.

In the financial year ended 31 March 2010, about 78% of MBL turnover related to sales to Morrisons.

Negotiations were continuing over stock balances and MBL said it would update investors as soon as a financial commitment had been agreed with Morrisons.

MBL said KPMG Corporate Finance would be appointed to seek a suitable purchaser for the group. This may or may not result in an offer for the entire issued share capital. The company was now in an offer period under the Takeover Code.

Finance director Steven Walsh-Hill would be leaving the business with immediate effect following failure to reach agreement on the terms of his appointment.

At 8:05am:

[LON:MRW] Morrison (Wm) Supermarkets share price was -2.65p at 275.85p

[LON:MUBL] share price was -8.5p at 22.5p

Story provided by