The bidding war for Londis has begun in earnest after the symbol group’s board unanimously decided that selling out to a bigger player was the best way to safeguard the future of its retailers.
Big Food Group, Musgrave, Somerfield, the Co-operative Group and Nisa-Today’s are all understood to be talking to Londis’ advisor KMPG, which has been instructed to handle the sale.
Separately, Londis chief executive Graham White and other senior executives are talking to KPMG about renegotiating their controversial share options package, which entitled them to 51% of the share capital in the event of a takeover.
Three months after Musgrave first announced a bid for the symbol group, the Londis board has backed KPMG’s recommendation that an outright sale is in shareholders’ best interests. But this at the very minimum should safeguard or enhance the Londis brand, existing trading terms, service levels and employment rights, said a spokesman.
KPMG will now conduct negotiations with interested parties, and will then be asked to determine whether a suitable deal can be agreed, which would be put to shareholders.
This process is expected to take between six and eight weeks.
The Londis Shareholders Action Group said the statement confirmed its worst fears. Deputy chairman Adrian Costain said: “This was quite at odds with what we had been hearing from the new non-executive directors at meetings this week. The sale has been pushed through for the financial convenience of the directors.”
Other Londis members welcomed the news. however. Wootten-based retailer Seamus Lehel spoke for many when he said: “Standing still is not an option in this market.
“We need to be more professional. It is in our best interests if we are bought by a credible company. There’s nothing to be scared about - we should be petrified if we don’t change.”