Londis battle takes new turn as Nisa cuts out middleman

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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."