Musgrave faces nine potential rivals if it stays in the hunt to buy UK-based corner-shop franchise Londis, it emerged yesterday.
Mr Stephen Barrett of KPMG, the consultants hired to review the Londis group's future, told The Irish Times yesterday that he had met 10 potential bidders for the franchise over the past month.
One of these was Irish grocery group Musgrave, which narrowly failed to buy Londis for €57 million last month. The deal fell apart amid a row over Musgrave's offer to pay €30 million to four managers and executives, and €14,740 each to Londis's 1,933 retailer shareholders.
The offer was in line with an agreement struck between management and the shareholders. However, the Big Food Group (BFG), owner of the Iceland chain, tabled a rival offer. It said it would double the retailers' take and halve management's share.
The Londis board withdrew its support for the Musgrave bid, leaving the Irish business with no choice but to drop the offer. However, its chief executive, Mr Seamus Scally, has since made it clear that it still wants to buy Londis at the right price.
Mr Barrett would not name any of the potential bidders. But he said that the KPMG review was not just aimed at finding a buyer. "We are looking at all strategy options," he said, adding that the consultants were on track to complete the process by the end of February.
Any bid will have to run the gauntlet of a board with increased shareholder representation. Londis yesterday announced that it had appointed five new non-executive directors, four of whom are existing franchisees. This will increase shareholder representation from three to seven, out of a total of nine.
One new appointee is Mr Ramesh Shingadia, who led the shareholders' charge against the Musgrave offer. He said yesterday that he would resign from the Londis Shareholders' Action Group to guarantee impartiality. The other shareholder-directors are Mr Rodney Braxton, Mr Mike Howe and Mr Rod Bailey. Former Alliance & Leicester group managing director and Lloyds TSB executive, Mr Peter McNamara, completes the line-up.
