Londis rejects offer above Musgrave's

THE board of Britain's Londis chain has rejected a new offer for the company which is higher than the bid from Musgrave's.

Londis on Monday night received a £63 million (€94m) offer, but rejected the bid in favour of Musgrave's £60m (€90m) as the Cork firm's offer had less uncertainty for shareholders.

Musgrave's bid will be voted on by the 2,000 Londis shareholders, who also own the shops, later this month. Backed by the board, it will see individual shareholders net £31,000 (€46,000). The shareholders originally paid £50 (€75).

Lancelot, the new bidder, is a company set up by two executives from a rival convenience store group.

Under the cash and share offer, Lancelot would pay £25.2 million (€37.7m) for a 40% stake in the company, valuing each share at £33,227 (€49,724). Each shopkeeper would receive £13,291 (€19,890) in cash.

"The proposal from Lancelot offers uncertain value and fails to match the criteria determined by shareholders," Londis's vice-chairman and acting chief executive Peter McNamara said.

Lancelot said its offer gave "significantly more value" than Musgrave's.

Musgrave's got a further boost in recent days with two of the key shareholder group throwing their weight behind the Irish bid. The Londis Shareholders Action Group (LSAG) and the Preferred Alliance of Londis Shopkeepers (Pals) said Musgrave's bid would return the most cash to shopkeepers.

Lancelot had flagged its interest last month.

Londis has effectively been on the market since last December when Musgrave's launched a £40m (€59.84) bid. This was rejected after it emerged four directors would share half of this. More than 20 bids were received in April, but Musgrave's received the recommendation of the board.