Nisa-Today’s has finally put its cards on the table and proposed a merger with Londis that would retain its mutual status and generate substantial savings for members through synergies in buying and logistics.
The move follows a Londis Shareholders Action Group survey revealing two thirds of the 370 respondents would prefer to retain mutual status.
In an open letter to Londis shareholders, Nisa-Today’s chairman Dudley Ramsden said repeated attempts to talk to Londis chief executive Graham White about the benefits of a merger had fallen on deaf ears.
Surprise quickly turned to “extreme disappointment” when news of the recommended offer by Musgrave was announced without giving members the opportunity to consider a deal that would allow them to retain their mutual status, he added.
Although no cash lump sum was forthcoming, Londis shareholders could exchange their £50 Londis share for an unspecified number of Nisa shares, said Ramsden.
If they were dissatisfied two years down the line, they could sell their shares back to Nisa at net asset value. Estimates on how much this might amount to ranged from £4,000 to £20,000.
Nisa-Today’s would not comment on how the deal would save “millions of pounds” although some Londis members said they expected Nisa would manage all buying and logistics though its central distribution operation, which is being strengthened in the summer with a new temperature-controlled depot in the south.
Nisa-Today’s deputy chairman Edwin Booth explained that, although Londis already has preferable terms through its membership of Nisa’s central buying company, a merger would “cut out significant overheads”.
Nisa’s decision not to enter the formal bidding process with KPMG and to approach Londis shareholders directly was a shrewd one, added one source close to the company. This would save cash in advisory/ accountancy fees and stop Nisa having to sign agreements that could block future approaches to Londis retailers, he added.
Elaine Watson
The move follows a Londis Shareholders Action Group survey revealing two thirds of the 370 respondents would prefer to retain mutual status.
In an open letter to Londis shareholders, Nisa-Today’s chairman Dudley Ramsden said repeated attempts to talk to Londis chief executive Graham White about the benefits of a merger had fallen on deaf ears.
Surprise quickly turned to “extreme disappointment” when news of the recommended offer by Musgrave was announced without giving members the opportunity to consider a deal that would allow them to retain their mutual status, he added.
Although no cash lump sum was forthcoming, Londis shareholders could exchange their £50 Londis share for an unspecified number of Nisa shares, said Ramsden.
If they were dissatisfied two years down the line, they could sell their shares back to Nisa at net asset value. Estimates on how much this might amount to ranged from £4,000 to £20,000.
Nisa-Today’s would not comment on how the deal would save “millions of pounds” although some Londis members said they expected Nisa would manage all buying and logistics though its central distribution operation, which is being strengthened in the summer with a new temperature-controlled depot in the south.
Nisa-Today’s deputy chairman Edwin Booth explained that, although Londis already has preferable terms through its membership of Nisa’s central buying company, a merger would “cut out significant overheads”.
Nisa’s decision not to enter the formal bidding process with KPMG and to approach Londis shareholders directly was a shrewd one, added one source close to the company. This would save cash in advisory/ accountancy fees and stop Nisa having to sign agreements that could block future approaches to Londis retailers, he added.
Elaine Watson
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