Forecourt retailers with Londis stores stand to pocket more than £30,000 following a new offer by Budgens owner Musgrave, to buy the symbol group.
Last year Musgrave bid £40 million for Londis, a deal that was scuppered following the scandal around the share-out of the proceeds. The four directors of the organisation would have shared £20m between them, leaving the rest shared between the 2,300 retailers – about £10,000 each.
Following a board shake-up and with advice from KPMG Corporate Finance, the latest round of bids has resulted in a £60m offer – the current new executive board will get nothing, while a deal with the four directors involved in the scandal will share £2m between them.
Shareholders will vote on the latest deal in the coming weeks, and if agreed, the owners of the 250 Londis forecourts will receive a cheque for £15,633 immediately – in return for their Londis share, bought for £50 on signing up to the group – and the balance in a year’s time, if they are still part of the group.
Peter McNamara, vice chairman of Londis, said: “Over the past few months, we have worked hard as a restructured board in evaluating the strategic options available to Londis. This included extensive consultation with our shareholders.
“We concluded that a sale was the right way forward and we talked to a wide range of potential counterparties. An exhaustive process was implemented to surface all known interest, and to extract from potential counterparties their best propositions.
“We have weighed up all the relevant considerations carefully and concluded unanimously that the new Musgrave proposal is
in the best interests of our shareholders.”
Eoin McGettigan, executive chairman of Musgrave UK, said he was “delighted” that the Londis board is to recommend the company’s offer to its shareholders. “We always knew that we could provide a strong and attractive strategic partnership to Londis shareholders,” he said. “Musgrave has a profound commitment to the independent grocery retail sector. Our 128-year heritage of working with independent retailers gives us a level of expertise and know-how which is unique in British retailing.
“Our aim always is to provide total support to the retailers, giving them the opportunity to grow their stores and serve their communities.”
In an added twist to the story, the board of the Big Food Group plc also issued a statement stressing that it remained interested in the possible acquisition of Londis and would continue to consider its options in relation to the company.
It also said that despite making its strategic case as a potential acquirer and seeking to engage the board of Londis in discussions, it had not participated in the process run by KPMG because of the anti-competitive constraints Londis and KPMG sought to impose as a pre-condition to participation.
“BFG has not therefore submitted an offer for Londis”, said the statement.
Thirty Londis retailers have already agreed to join the Costcutter Supermarket Group, tempted by the company’s offer of a package worth £30,000, according to Colin Graves, the company’s chairman and managing director. “At the moment we have approximately 40 Londis stores on board, and there are another 20-30 currently in talks with us, and we have had to increase our Induction Programme to satisfy demand.
“We are very pleased with this upturn in recruitment, as the stores we are attracting are very high quality, well-run businesses. Feedback from our new members tells me that as a group Costcutter is doing it right!”
He said there had been much speculation about Costcutter putting in a bid for the total Londis estate, but confirmed this had never been an option.
Meanwhile more than 300 Costcutter retailers representing 500 stores attended the group’s national conference at Stoneleigh last month, during which directors gave an update on the company’s “continuing excellent performance” and future plans.