Londis shop owners to cash in as board agrees £60m takeover

Click to follow
The Independent Online

Hundreds of shareholders in Londis are set to triple their windfall to £31,000 after their board struck a renewed agreement to sell the convenience store group to Ireland's Musgrave for £60m.

Hundreds of shareholders in Londis are set to triple their windfall to £31,000 after their board struck a renewed agreement to sell the convenience store group to Ireland's Musgrave for £60m.

Yesterday's deal is worth £20m more than Musgrave's original takeover offer last December. The Irish retailer was forced to rethink its bid after an outcry from Londis's shareholders at the prospective £20m payout to the company's four executive directors, compared with the £10,000 they stood to receive.

Kishor Patel, who chairs an action group set up to challenge the original deal, gave a cautious welcome to the new bid but queried whether Londis would be better off as part of Musgrave. "Is £60m the right price tag?" he asked, adding: "Our buying terms and access to better fresh and chilled products still remains a grey area."

Under the renewed terms, Londis's top four executive directors - Graham White, Andrew Wallace, Denise Buller and Terry Bedford - will receive none of the £60m. All the proceeds will be shared between the convenience store group's 1,919 members. Instead, the directors will share a £2m one-off payment, which will be paid out of Londis's existing cash resources.

Londis, which put itself up for sale in January, admitted Musgrave's offer was lower than at least one of the other three shortlisted bidders but said the Irish group provided the strongest strategic fit. The bid process, which was handled by KPMG, attracted interest from more than 20 parties across the retail sector, including Big Food Group, Somerfield and Thresher. Peter McNamara, who was drafted in as vice-chairman only weeks ago, said the deal was "a sparkling improvement on what went before". He admitted it was possible to be "very critical" of the Londis management team for stitching up a deal that would have netted the top four directors £20.4m, but declined to comment further.

The family-owned Musgrave, which acquired Budgens two years ago, has promised to keep the Londis brand for at least two years.

Comments