Companies battle to land Londis

Musgrave and the Co-op were today reported to be the leading contenders in the auction of convenience store business Londis.

The group – owned by the shopkeepers who hold shares in the wholesaling and distribution operation – is thought to be close to announcing its preferred bidder following a sale process overseen by KPMG Corporate Finance.

Musgrave is making its second attempt to land Londis after a £40m (€60.1m) proposal was scuppered in December when it emerged four Londis executives would net £20m (€30m) because of a clause in their bonus scheme.

KPMG has since restarted the bid process with Iceland owner Big Food Group, Somerfield, Costcutter and Nisa-Today’s among those linked to approaches.

However, the Mail on Sunday said that Irish-owned Musgrave, the Co-op and the off-licence chain Threshers – a surprise contender – were the front-runners.

The price tag for Londis is now believed to be around £50m (€75.1m) with shopkeepers set for sizeable windfalls because of their shareholdings.

As well as price, the shopkeepers will be keen to secure a deal that safeguards the distribution of produce to their stores.

Around 2,000 shopkeepers have a share in the group and would have got in the region of £10,000 (€15,000) each under the Musgrave offer.

The directors, who would have shared the £20m (€30m) from Musgrave’s initial offer, have since agreed to drop their rights to the bonus scheme and instead agreed to receive a one-off settlement totalling £2m (€3m).