Londis faces new bid from former T&S management

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The Independent Online

The long-running battle for control of Londis, the convenience store chain, re-ignited yesterday when a group of former T&S Stores directors launched a £60m counter-bid to thwart an agreed deal with Ireland's Musgrave.

The long-running battle for control of Londis, the convenience store chain, re-ignited yesterday when a group of former T&S Stores directors launched a £60m counter-bid to thwart an agreed deal with Ireland's Musgrave.

Under the rival proposal, worth the same as Musgrave's, the 1,919 shopkeepers that own Londis would retain control of 60 per cent of the group. Each would receive £31,000, split between cash and shares.

The new bidders, who are backed by Iceland's Kaupthing Bank, will today seek to persuade the vocal shareholder action group to back their deal. The action group was central to the collapse of Musgrave's initial £40m deal, which handed only £10,000 to shareholders.

Adrian Costain, a Londis shopkeeper and deputy chairman of the action group, said yesterday he was prepared to "actively support" the new bid. "I think it has the best prospects of success," he added.

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. They will be unable to persuade T&S's ex-chief executive to join them: J Sainsbury revealed last week it had recruited Jim McCarthy to head its convenience arm.

Mr Purdy said the management team, which will include yet-to-be-named buying and retail directors, would invest some of the £24.4m that its bidding vehicle, Lancelot, will spend on buying a 40 per cent stake in Londis. Their proposal, which was orchestrated by the private equity house Bridley Capital Partners, was rejected by Londis's board of directors, on the advice of KPMG, in January.

Mr Purdy said: "We were miffed [by that] because it wasn't giving shopkeepers a choice." He said Lancelot's deal gave shopkeepers the best of both worlds: "Good value for part of their share of the business [and] a majority stake so they can benefit from the rewards of the turnaround of the company."

A Londis spokesman said the company, which is still waiting to hear directly from Lancelot, would continue to back Musgrave's bid.

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