Lancelot raises the stakes with £63m bid for Londis

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The Independent Online

Londis shareholders were yesterday offered an extra £3m for their business as a consortium led by former directors of T&S Stores raised its counter-bid for the convenience store chain to £63m.

Londis shareholders were yesterday offered an extra £3m for their business as a consortium led by former directors of T&S Stores raised its counter-bid for the convenience store chain to £63m.

The move came as Lancelot, the bidding vehicle backed by the Icelandic Kaupthing Bank, launched a formal offer for Londis, which was put up for sale at the start of the year.

It has offered to pay £25.2m for 40 per cent of Londis, leaving the remainder in the hands of the group's 1,919 shareholders that run its 2,200-strong estate. Under the new deal, each shopkeeper's stake - acquired for £50 - is worth £31,155 against £31,000 previously.

Geoff Purdy, T&S Stores' former buying and marketing director, has teamed up with the convenience chain's former finance director, David Crellin, to launch the bid.

"We have taken the decision to raise our offer because we are confident that over the long term we can deliver a stronger future to Londis shopkeepers and shareholders to that offered by Musgrave," Mr Purdy said.

The new bid comes two weeks before Londis shareholders are due to vote on a recommended £60m offer from Ireland's Musgrave, which acquired Budgens two years ago.

The Musgrave camp scored a significant coup over the weekend by winning the backing of the vocal Londis Shareholders Action Group, which has spoken up for the rights of the chain's shopkeepers during the six-month takeover saga. The action group said it was happy with Musgrave's terms regarding the proportion of goods it would sell Londis shopkeepers and the prices it would charge.

Mr Purdy has promised to grant Londis owners even better buying terms, to invest in their fresh food offer, and to give them access to low-cost finance to enable them to spruce up their shops. He has also pledged to hold regular meetings with storeowners.

Peter McNamara, the acting chief executive of Londis, yesterday urged shareholders to back the Musgrave bid at the extraordinary meeting on 22 June.

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