Irish convenience store group ADM Londis has rejected a E35m takeover bid from its rival, BWG, which operates the Spar and Mace franchises in the Republic.
The offer, which followed a series of contacts between the two over the past year, was turned down by ADM Londis after just one board meeting.
In a letter to shareholders, chairman Leo McCauley said the decision had been taken because “the offer is not strategically or financially in the best interests of our retail members or the company”.
But some shareholders are reported to be unhappy that the bid was not put to a vote of retailers. According to sources, a small number want to call an extraordinary general meeting to challenge the board’s decision. Their move, however, would have little prospect of success as it would require 75% support from delegates.
ADM Londis, which has the rights to the Londis brand in Ireland but has no other connection with the British Londis, claims a 7% share of the convenience market and is the fastest growing symbol group in the Republic. It opened 30 stores last year, bringing the total to 300, and reported a 14% increase in group sales to over E500m.
In December ADM Londis became the lead sponsor for the Irish Olympic team for the Athens games later this year. It
has also invested E1m on a new brand identity which was launched earlier this year, and the move has been backed up with a major TV advertising campaign. A successful takeover by BWG would have created a formidable combination.
It supplies 400 Spar outlets in the Republic with plans for a 20% expansion by the end of 2005. Last year, Spar recorded sales of E850m in the Irish Republic, a 12% increase on the 2002 figure.
BWG has sold off the Mace franchise in Northern Ireland, but still operates it south of the border in the Republic, in parts of Leinster and Munster.
Despite speculation that a bid of E40m might have met with a different response, a spokesman for BWG said it would not be making an improved offer.
Meanwhile, according to McCauley, the ADM Londis board and management “are now in a position to focus on the positive growth of the business following a year of tremendous change and speculation”.
Anthony Garvey