Musgrave's €57 million bid for the Londis symbol group in Britain was plunged into uncertainty last night, when the Londis board said it was open to considering other offers.
The board, which had previously recommended the Musgrave bid, also called off the extraordinary general meeting at which Londis shareholders had been due to vote on the matter.
The move came some hours after a rival offer for Londis was presented by Iceland owner The Big Food Group (BFG).
Londis said it had also received a number of other "approaches" from potential bidders since the announcement of the proposed Musgrave acquisition last week.
In a statement, it said it would allow all interested parties access to the company's books as long as suitable confidentiality undertakings could be put in place.
"The board intends to conduct an orderly process with a view, so far as practical, of obtaining proposals that are directly comparable, recognising that it is in the company's interests to resolve its future ownership without undue delay," the statement said.
Musgrave made no comment last night, but it remains the only party to have put a firm bid on the table.
Under the terms of this offer, Musgrave would receive a payment of £400,000 sterling (€570,550) from Londis if its bid were rejected in favour of another approach.
BFG, a listed company, wrote to Londis shareholders yesterday with details of an "alternative offer" it planned to make if the Musgrave bid was rejected at the e.g.m., which was then scheduled for December 30th.
The hostile bid came amid shareholder discontent at Londis, where convenience store owners are disgruntled at the level of return due to them under the Musgrave offer.
The deal would see four Londis directors sharing more than half of the sale proceeds, while almost 2,000 store owners would each receive £10,000. The same four directors recently shared payment of £7.1 million when they renegotiated their contracts.
While the overall value of the BFG bid is broadly similar to the Musgrave offer, its structure is very different. It would result in each Londis retailer gaining £20,300 for each share they hold, while management would share just £600,000.
The BFG letter encouraged shareholders to shun the Musgrave offer, despite recognising that Londis management, which controls 51 per cent of the company on acquisition, could choose to block any offer.
"We believe that if the Londis shareholders and the wider business community make clear their views on tactics of this sort, your management will ultimately co-operate," the letter read.
Retail analysts at investment house Seymour Pierce were sceptical of this attempt at "scaring the Londis management team to back down", but acknowledged that it could create a stalemate at the company.
Meanwhile, it was unclear yesterday how Nisa-Today's, another firm known to be considering an offer for Londis, would proceed on the issue. A spokeswoman confirmed that "opportunities" were still being investigated by the company.
