Irish wholesaler Musgrave has stunned the trade by brokering its second major deal in the UK in less than two years with a £40m bid for Londis that would double its UK turnover.
But as The Grocer went to press there was a backlash from Londis retailers unhappy at the massive payouts the deal will trigger for its four key directors.
Londis directors Graham White, Andrew Wallace, Terry Bedford and Denise Buller stand
to net £6.8m, £4.8m, £4.8m and £4m respectively if the deal goes through, accounting for 51% of Londis’ share capital.
Del Patel, of Londis, Kettering, said: “It concerns me how they [the directors] can be given such enormous amounts and individual retailers not get more. It seems very unfair. I might vote against it if I thought it could affect their payment.”
But Londis chairman and retailer Peter Williams said: “They are a just reward for all the hard work they have put in and the success they have achieved. They absolutely deserve it as without them the members wouldn’t even be getting their £50 back, we would have gone out of business.”
Londis members will also receive a windfall which could top £10,000. Each of its 1,933 members has a £50 share which would be bought by Musgrave for £6,370. A second payment of £4,000 is conditional on their remaining Londis members for a period of 12 months.
The symbol group’s members will vote on the proposal at an EGM on December 30.
The two parties had been talking for the best part of a year, said Londis chief executive Graham White, who plans to retire next year if members accept the offer. Sales director Terry Bedford and commercial director Denise Buller will help with the handover - likely to take three to six months - and then review their positions.
After the handover, a new board will be appointed led by Musgrave UK executive chairman Eoin McGettigan. No redundancies are planned and Londis’ HQ at Hampton Hill will remain for the foreseeable future, said White. But a joint Londis/Musgrave team will “review all areas of the business over the next 12 to 18 months”.
McGettigan stressed the deal was good news for Londis members who would benefit from being part of a larger group able to extract buying and distribution synergies.
White added: “There are clear synergies within the buying stream of full truck loads, backhauling and so on.”
Jerry Marwood, MD of rival Spar, said he was confident of maintaining leadership in the symbol sector. “It goes without saying we would welcome any suitable Londis members not inclined to make the move.”
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