Londis retailers received details of Musgrave’s offer for the group on Wednesday, and now have until June 20 to vote on whether to accept the deal.
An EGM is then scheduled to take place at the Birmingham Hilton on June 22 where the decision will be taken. They are being offered payment of £15,823 for their shares, with an additional £15,822 if they remain members for a year.
However, a new challenger to Musgrave emerged this week with former T& S Stores buying and marketing director Geoff Purdy leading a management buy-in team backed by Nordic financiers Kaupthing Bank.
He said his proposal to buy a minority stake in Londis would leave retailers in control of their group, so they did not need to hand over control to Musgrave.
His said his bid valued the company at £60m, matching the offer from Musgrave, and that Londis shareholders would each receive about £31,000 in cash and shares.
Purdy would become ceo of the company with former T& S finance director David Crellin as the finance director. Purdy said a buying director and a retail director were also committed to join the team, but could not be named because they were still in employment.
He said his offer had a number of advantages for Londis members compared with Musgrave’s. In addition to retaining control of the group,
they would also receive an annual dividend from their shareholding.
Also, he said if retailers sold their shares now, they would be selling too early because the
shares would grow in value over the next few years, and his deal would allow them to benefit from this. He also said Kaupthing would provide funds for investment in the business. However, Purdy said he could not make a formal bid until he was allowed to see the Londis books. The Londis board were currently refusing him access.
Big Food Group has also expressed interest in Londis but it had said it was waiting to see Musgrave’s offer document. On Thursday, chief executive Bill Grimsey said he had not had time to study the deal because he had been preparing for the announcement of BFG’s results.
However, Londis vice chairman Peter McNamara told The Grocer: “If the Musgrave deal does not achieve the required 75% vote, I cannot see that any other proposal would be more accceptable and Londis would be likely to remain as it is.”
>>p8 Big Food Group
John Wood