A bidding war for Londis loomed as The Grocer went to press, with Big Food Group entering the fray and Nisa-Today’s considering its options.
Big Food Group, which has sent out a letter to Londis shareholders urging them to reject Musgrave’s deal, is wooing Londis retailers with £20,000 in cash over two years - double the amount they would get under Musgrave.
Chief executive Bill Grimsey said: “Under our offer, Londis retail shareholders would get £39.7m, while the directors would get £0.6m. Under Musgrave’s offer, four directors would get more than £20m.”
If Londis retailers rejected Musgrave’s offer at the EGM on December 30, the message to the directors would be clear, said Grimsey. “The management will co-operate once they realise the shareholders’ views.”
Big Food Group will mail out a formal offer document before December 30 detailing its plans, said Grimsey. However, aside from the short-term cash benefits, Big Food Group was able
to offer Londis retailers more opportunities than Musgrave to drive their business with a better range, better service and more scale, he said.
“Musgrave just has Budgens in the UK - they are not national and they are already operating to full capacity at their distribution centre. We are offering retailers the opportunity to be part of a national organisation delivering to more than 4,000 c-stores -2,232 Londis stores, 1,259 Booker Premier Stores and 746 Icelands.”
The Londis brand would stay for the foreseeable future. Big Food Group would overtake Spar to become the largest UK symbol group operator.
Grimsey had been in talks with the Londis board for several days but had not been able to broker a deal, he said. “In this situation, we had to take a hostile route and approach the shareholders.”
As far as Big Food Group’s own shareholders were concerned, the deal brought another £500m in sales/buying power and £3.8m worth of operating profit and would be earnings enhancing in 2004-5, he added. “We’ve been concentrating on recovery, but this made us look at acquisition opportunities a little earlier than anticipated.”
Big Food Group, which has sent out a letter to Londis shareholders urging them to reject Musgrave’s deal, is wooing Londis retailers with £20,000 in cash over two years - double the amount they would get under Musgrave.
Chief executive Bill Grimsey said: “Under our offer, Londis retail shareholders would get £39.7m, while the directors would get £0.6m. Under Musgrave’s offer, four directors would get more than £20m.”
If Londis retailers rejected Musgrave’s offer at the EGM on December 30, the message to the directors would be clear, said Grimsey. “The management will co-operate once they realise the shareholders’ views.”
Big Food Group will mail out a formal offer document before December 30 detailing its plans, said Grimsey. However, aside from the short-term cash benefits, Big Food Group was able
to offer Londis retailers more opportunities than Musgrave to drive their business with a better range, better service and more scale, he said.
“Musgrave just has Budgens in the UK - they are not national and they are already operating to full capacity at their distribution centre. We are offering retailers the opportunity to be part of a national organisation delivering to more than 4,000 c-stores -2,232 Londis stores, 1,259 Booker Premier Stores and 746 Icelands.”
The Londis brand would stay for the foreseeable future. Big Food Group would overtake Spar to become the largest UK symbol group operator.
Grimsey had been in talks with the Londis board for several days but had not been able to broker a deal, he said. “In this situation, we had to take a hostile route and approach the shareholders.”
As far as Big Food Group’s own shareholders were concerned, the deal brought another £500m in sales/buying power and £3.8m worth of operating profit and would be earnings enhancing in 2004-5, he added. “We’ve been concentrating on recovery, but this made us look at acquisition opportunities a little earlier than anticipated.”
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