Morrisons has tabled a last-gasp bid to wrest McColl’s Retail Group from the clutches of its Asda-owning rivals just hours before administrators are formally appointed to oversee its sale.

Sky News can reveal that Morrisons has lodged an improved offer with McColl’s lenders that would see them repaid immediately in full, satisfying their principal demand.

It was unclear on what basis the latest proposal could be rejected, or whether EG Group – which appeared on Friday to have sewn up a swoop on one of Britain’s biggest convenience chains – would seek to prevent it going through with a further proposal of its own.

There were suggestions on Sunday afternoon that PricewaterhouseCoopers (PwC), the adviser to McColl’s lenders, was preparing to stage a final two-way shootout between the rival suitors later this evening, with both asked to table best and final bids.

PwC declined to comment.

The demise of McColl’s has rapidly turned into a political controversy encompassing its pension scheme and the fate of its 16,000 workers.

McColl’s lenders rejected a solvent rescue offer from Morrisons on Friday that would have involved them rolling over more than £100m of debt into the supermarket chain, but being repaid in full as the loans expired.

Sources told Sky News last week that the lenders were demanding immediate repayment, leading them to opt for a rival bid from EG Group, the petrol retailing behemoth, that involved instant repayment of the bulk of their debts but was conditional on McColl’s being placed into administration.

This weekend, the trustees of McColl’s pension schemes waded into the row, with a spokesperson saying: “Any company looking to acquire McColl’s must do the decent thing and ensure that promises made to staff about their pensions are honoured.

“We would be extremely surprised if any organisation with an interest in demonstrating good corporate citizenship were to use a pre-pack administration to cease supporting the schemes, with absolutely no engagement with the trustees.”

In a stock exchange announcement on Friday afternoon, McColl’s said its board had “regrettably… [been] left with no choice other than to place the company in administration, appointing PriceWaterhouseCoopers LLP as administrators, in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible”.

However, although technically McColl’s may have been insolvent at the point that its lenders declined to extend their waiver, PwC’s appointment had yet to be rubber-stamped by the court by the time it closed on Friday – potentially leaving a window for a further counterbid from Morrisons.

A source close to the lenders said a further proposal would be properly considered.

Details of Morrisons’ revised offer were unclear, although the supermarket group said late last week that there was no basis for McColl’s being placed into insolvency proceedings.

Morrisons had pledged to keep “the vast majority of jobs and stores safe, as well as fully protecting pensioners and lenders”.

Attention will now turn to the decision made by the lenders, which include the taxpayer-backed NatWest Group, with Barclays and HSBC also said to be part of the borrowing facility.

Morrisons, which has an extensive wholesale agreement to supply McColl’s, and the company’s pension schemes are among the convenience retailer’s major creditors, although they rank behind the claims of the senior lending syndicate.

Questions are also likely to be raised about PwC’s prospective dual role as adviser to McColl’s lenders and as administrator if the crisis leads to an inferior outcome in terms of job retention and pension payments.

It was unclear how many of McColl’s 16,000-strong workforce would keep their jobs under the rival proposals from Morrisons and EG Group, although sources close to the situation believe that some stores would ultimately be closed under either scenario.

McColl’s is an important partner of Morrisons, operating hundreds of smaller shops under the Morrisons Daily brand.

Sky News reported in February that McColl’s was scrambling to secure new funding that would allay concerns about its future.

The company, which is listed on the London Stock Exchange but had its shares suspended on Friday, employs roughly 6,000 people on a full-time equivalent basis.

It raised £30m from shareholders in a cash call just eight months ago.

If administration is confirmed on Monday, it would be the largest insolvency in the UK retail sector by size of workforce since the collapse of Edinburgh Woollen Mill Group in 2020.

Since then, both Debenhams, which employed about 12,000 people, and Sir Philip Green’s Arcadia Group, which had a workforce numbering roughly 13,000, have also gone bust, becoming casualties of changing retail shopping habits and the pandemic.

Morrisons and McColl’s declined to comment.