Musgrave may face rival bid for Londis

MUSGRAVES ambitious 57 million takeover of the Londis operation in Britain may face a challenge from the rival Nisa-Today’s, a rival convenience store supplier group.

The proposed takeover has already been engulfed in controversy as shareholders in Londis are up in arms that top executives could pocket as much as half of the 57 million sale price agreed with the Musgrave Group, which operates the SuperValu and Centra franchises in Ireland.

Nisa, which styles itself as Britain’s largest buying group for independent retail and wholesale companies, is understood to be in the process of putting together a rival bid which will deliver more of the profits to the company’s 1,956 individual store owning shareholders.

An extraordinary general meeting (egm) of Londis shareholders called for December 30 to approve the deal with Musgrave Group is expected to be a heated affair with a growing cabal of shareholders set to oppose the takeover by the family owned Irish company. It is estimated that as many of 250 shop owners are openly opposing the deal. Shareholders are not objecting to the sale of the company to Musgrave Group but are opposed to the divvy-up of the spoils which will see management reap the bulk of the 57m sale price.

Musgrave had agreed with the British board of Londis, which has no connection with Londis in Ireland, to buy the entire issued capital of the company. The offer will be voted upon by British shareholding members at a Londis EGM on December 30.

If it is accepted, Musgrave will take control of Londis at the end of January 2004. However, the date of the EGM may be changed as many retailers say it clashes with one of the busiest trading periods of the year.

Musgraves already own 230 medium-size Budgen supermarkets and convenience stores in the south of England and if the proposed deal goes through, the Londis name will be retained alongside that of Budgens. Musgrave did not comment on the most recent developments yesterday.