As The Grocer went to press, a report recommending the future strategy for Londis was about to be delivered to directors of the symbol group.
The board will then decide on the future direction of the company within a matter of days.
Although five potential courses of action were considered, the most likely outcomes are thought to be: a sale of the company; “co-habiting with a partner” which could provide additional services such as chilled and frozen deliveries; or remaining as it is. The other two options were flotation or findng other ways to raise money to invest in the business
The directors will meet to consider the report over the next seven to 10 days, and are also expected to have meetings with protest groups of Londis retailers before announcing their decision in a bulletin to members. The report was commissioned from KPMG after a bid for Londis in December triggered protests.
Many Londis retailers, each of whom has a single share in the company, were upset when they were informed share options entitled four directors to half the proceeds of any sale.
As a number of potential bidders and other proposals emerged after Musgrave’s initial offer for Londis, members also complained that they needed independent guidance in order to decide on the best option.
KPMG asked interested companies to make indicative bids for the company by the end of this week, and if the board decides on a sale of the company these will then be considered.
Musgrave and Big Food Group have confirmed their interest in the group, while Bestway, Somerfield and the Co-operative Group are all believed to have considered bidding.
The recently appointed Londis vice chairman Peter McNamara and KPMG have also started talks with the four executive directors about reducing the share options they were awarded 14 months ago.
The company has received legal advice that the options, giving the four directors 51% of the shares in the case of a sale, constitute a legally binding contract.
However, at the agm last December the directors indicated their “preparedness to be flexible and waive some of their entitlement”.