Musgrave is one of three potential buyers left in the running for the Londis UK convenience store group, which is likely to sell for around €80 million.
The Londis board's adviser, KPMG Corporate Finance, is on the verge of recommending the sale of the shopkeeper-owned group to either Cork-based grocery distributor and retail franchisor Musgrave or one of two British suitors, the Co-operative supermarket group or off-licence chain Threshers.
The asking price is likely to be in the region of £50 million sterling (€83 million), compared to the €57 million that Musgrave originally offered when it made a failed bid to buy the group late last year. The price has gone up because Londis UK's stores have increased sales this year.
KPMG has shortlisted the three aspirants from as many as 10 original bidders. The firm began a strategic review of Londis shortly after Christmas and concluded that the best way forward for the group was a sale.
The Londis board subsequently instructed KPMG to begin talks with Musgrave and a number of other parties that had made indicative proposals during the strategic review in January.
The company has never said how many bidders originally expressed interest, but KPMG told The Irish Times three months ago that it had spoken to 10 interested parties.
The Londis board is expected to recommend one of the three remaining offers within days. According to the original time table for the review and sale process, it intended to put an offer to the shareholders in May. They will have the ultimate say on whether or not the group is sold.
At €83 million, Londis' 2,000 shopkeeper shareholders will receive €41,500 each. The group's directors have waived the terms of an agreement that gave them half the proceeds of any sale of the business in return for a number of payments. The shareholders will now share all the money paid for the group.
A controversy over special payments to Londis directors de-railed Musgrave's original €57 million bid last December. Under those terms, the directors would have shared €28.5 million, while the 2,000 shopkeepers would have received €14,400 each.
While the Londis board at that time recommended the Musgrave offer, an alternative bid from the Big Food Group (BFG) forced it to withdraw that support. BFG offered a similar sum of money, but promised better terms to the shareholders. It was this sequence of events that sparked the KPMG review and the current sale process.
Musgrave chief executive, Mr Séamus Scally, made it clear in January that the company was still interested in buying Londis UK at the right price. If its succeeds, it will be second British convenience store chain to fall into the Cork company's hands.
It already owns Bugdens, which has 232 outlets across the UK. In this country, it has the Centra and Super Valu brands, which have over 19 per cent of the grocery market here.
