Bill Grimsey, the chief executive of Big Food Group, went on the offensive yesterday in the increasingly acrimonious takeover battle surrounding Londis, the chain of convenience stores which has been put up for sale.
Mr Grimsey issued a statement urging Londis shareholders to accept a £40.3m takeover offer from BFG. The statement comes before the Londis annual meeting tomorrow where dissident shareholders in the convenience store group will call for the removal of the company's non-executive directors, including Peter Williams, the chairman.
Mr Grimsey's statement set out seven principles under which BFG planned to work with Londis retailers. It emphasised that the retailers would not suffer a worsening of their terms of trade under BFG's proposed takeover.
Londis, which was recently forced by shareholders to withdraw its recommendation of a £40m bid from Musgrave Group, acts as a wholesaler to the 1,993 independent retailers who are also its shareholders. The retailers were furious that the Musgrave offer would have given four executive directors a £20m windfall to share.
Londis has now agreed to open up the sale process to all comers and is understood to have received expressions of interest from about six rival bidders.
Mr Grimsey plans a series of roadshows around the country to persuade the Londis shareholders to accept BFG's bid. The meetings will begin early in January.
He said yesterday: "We have written to the board of Londis about our participation in the sale process they are establishing. We are eager to have the opportunity to put our business case to the Londis shareholders so they know the facts about how we anticipate working with them if we are successful. In today's ever more competitive high street, we are convinced that BFG would be the right partner for Londis shareholders."
The seven-point plan issued yesterday said Londis would be managed as a separate business unit within BFG and that it would be a core brand alongside, but independent from, BFG's Iceland, Booker, Woodward and Premier brands.
"It is expected that Londis shareholders would continue to enjoy their current or better terms of trade once within BFG," the company said.
Fears of a potential worsening of the retailers' terms of trade, including the price at which they buy supplies from their wholesaler, have been at the centre of shareholder scepticism over the BFG approach.
Mr Grimsey promised that the Londis wholesale delivery network would also be retained with the additional support of BFG's own national logistics operation. He also said the Londis range of chilled and frozen foods would be improved by BFG's product development expertise. He also stressed that the Londis partnership culture would be protected.
Londis shareholders reacted with caution to Mr Grimsey's overtures yesterday, insisting that other issues before tomorrow's annual meeting, such as the make-up of the board, were at the forefront of their minds.
Yesterday it emerged that Londis has gone some way to addressing the demands of dissident shareholders by appointing KPMG to undertake an independent strategic review of the company's options, which may or may not include a sale.
Adrian Costain, a Londis retailer leading an action group against the current board, said: "Londis is trying to steal some of our clothes with KPMG which was one of the names on our list for an independent review. It is a step in the right direction but the main issue at the moment is that the corporate governance relationship has broken down altogether in the organisation. We believe that we have to remove the non-executive directors."
People close to Londis stressed that the race to win control of the group would not necessarily go to the highest bidder but the one offering the best terms of trade as well.Reuse content