Musgrave faces a tense two weeks before its bid for Londis is put to the vote on June 22 as Londis shareholders continue to be wooed by a rival suitor.
Although Big Food Group officially withdrew its interest on Wednesday, former T& S buying chief Geoff Purdy has written to Londis shareholders urging them to reject Musgrave’s £60m offer and give him time to put together a formal bid.
Big Food Group has made it clear it is keen to pursue strategic alliances with Londis retailers if the Musgrave bid fails. These might include joint buying, chilled deliveries to Londis stores from BFG depots and IT initiatives.
Both Purdy and BFG claim they have not been given access to the detailed operational and financial information on Londis they need to make a formal bid because they would not sign a confidentiality agreement.
This would have stopped them from talking to Londis retailers for up to a year.
Big Food Group claimed it had pulled out of the running
because of financial concerns raised by Londis’ annual report and the “growing body of opinion among Londis retailers that they would prefer Londis to remain independent”.
A BFG spokesman rejected claims it didn’t have the money to make an offer and that it was simply trying to scupper the Musgrave deal. He said: “There is a lot we can do if Londis stays independent. Ownership is not core to realising mutual benefit.”
Purdy entered the fray last week with backing from Nordic financiers Kaupthing Bank for a management-buy-in vehicle called Lancelot. His offer would give Londis retailers £12,000 cash and just over £18,000 in shares, leaving them with a controlling stake in the business, he claimed (The Grocer, May 29, p10).
“We believe the board made a mistake not letting the retailers know there was a credible alternative to a trade sale.”
Londis Shareholders Action Group chairman Kishor Patel said the group was waiting for clarification from Musgrave over a couple of points before making a recommendation to retailers over which way to vote.
Elaine Watson