Londis battle takes new turn as Nisa cuts out middleman

The fight for control of Londis, one of the country's biggest convenience store chains, intensified yesterday when the buying group Nisa-Today's unveiled plans to merge with the company.

Bypassing the sales process set up by the Londis board, Nisa-Today's sent an open letter to the group's shareholders, urging them to consider a merger to create a convenience store behemoth that would be able to take on the growing might of supermarket majors such as Tesco.

Dudley Ramsden, Nisa-Today's executive chairman and founder, said a merger would "ensure [Londis shareholders'] future survival and prosperity". His move follows a climbdown by the Londis board, which had previously favoured a £40m takeover by the Irish group Musgrave that would have netted the four top directors a £20m windfall.

Mr Ramsden said he had been courting Londis for a number of years but had decided not to compete in the "bidding auction" because he felt "an outright sale is not in the best long-term interests of Londis owners". He added: "It is my belief that you should remain within a mutual organisation and in control of your own destiny."

Rather than pay a premium for control, Nisa-Today's, which is a mutual organisation with some 800 retail and wholesale members, is proposing that each Londis owner should swap their single £50 share in Londis for shares in the buying group, creating a company with a 5,000-plus store portfolio.

It is calling on Londis shareholders to quiz KPMG, the accountancy firm handling the sales process, about why a merger of the two mutuals was never proposed by the Londis board.

One Londis investor said that while he would back a tie-up with Nisa-Today's, he thought most of his fellow shareholders would "rather have the cash" from a takeover.

Stephen Baratt, who is handling the sales process at KPMG, said he was "puzzled" by Nisa-Today's move, adding: "If they are serious about giving Londis' shareholders an attractive opportunity they should join in the process."