Ireland-based retailer Musgrave has struck a deal to buy Superquinn after its troubled local rival was put into receivership amid high debts.

Musgrave, which runs chains including SuperValu in Ireland, Budgens in the UK and Dialprix in Spain, said today (19 July) it had reached agreement with Superquinn’s receivers on terms to buy the retailer.

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Takeover speculation has surrounded Superquinn, with reports in Ireland in May that the retailer’s owners, Select Retail Holdings, had approached rival retailers and financial players to see if they were interested in buying the chain. There had also been rumours that Musgrave had made an offer to acquire the business.

The receivers, Kieran Wallace and Eamonn Richardson of KPMG, and Musgrave indicated that Superquinn, which runs 24 stores in Ireland, had faced financial pressure.

Richardson said Superquinn had been “heavily indebted, primarily due to property-related loans”, while Musgrave said the retailer had been “challenged by the scale of its debt burden”.

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The company and its receivers declined to comment on the exact total, although The Irish Independent said today that Superquinn’s debts to three banks reached EUR375m (US$532.2m).

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The receivers will run Superquinn until regulators decide on the deal and the acquisition is completed, Musgrave said.

Richardson said the stores would continue to operate as normal. He insisted the sale to Musgrave would be a “positive development for Superquinn, its employees, suppliers and customers”.

Musgrave said the acquisition would secure 2,800 jobs and insisted it would invest in Superquinn’s stores to develop the business.

CEO Chris Martin said: “Purchasing Superquinn, when approved, supports our growth agenda and will sustain our competitiveness. We are looking forward to working with the Superquinn team to develop the future of the business.”