Londis finally agrees Musgrave sale
massively in favour of the sale of the group for £60 million to
Musgrave, the Irish company that owns Budgens in the UK. A victory
for the Londis management, which successfully fought off both rival
offers and shareholder concerns to win backing for its preferred
bid.
Right up to last week's vote, the success of the Musgrave offer was in doubt, with a number of Londis shareholders concerned about the loss of the group's mutual status. But with no credible rival offers to choose from - especially after the Co-op, Britain's biggest mutual retail group, decided not to bid - supporters of a more mutual business such as the Londis Shareholders' Action Group (LSAG) and the Preferred Alliance of Londis Shopkeepers (Pals) had little choice but to accept the proposal.
Indeed, some 97.4 per cent of shreholders voting at the EGM backed the Musgrave deal, with just 43 votes (2.6 per cent of the total) against it.
Despite the overwhelming support for the offer, the Londis management faced some tough questions over the future of the company, in particular with regard to the loss of mutual status.
Eoin McGettigan, chairman of Musgrave UK, told shareholders: "We are a family business of wholesalers in Ireland with a 128-year history. We do not want to be in a competitive situation with the retailers we serve. That is why we previously announced our intention to sell our corporately-owned Budgens stores in the UK into private ownership."
Another shareholder wanted to know if Musgrave had projections for Londis' future growth. Seamus Scally, Musgrave's managing director, explained that Musgrave's immediate role was to look after the 2,000-plus existing members coming under the group's umbrella.
"We must consolidate first what is there: in that, we shall have a significant job to do and build on. You, the retailers, have immediate challenges. We want to engage with you to find the solutions. We shall still be talking to people who want to join us, but first we shall concentrate on our existing portfolio of Londis store owners. Only then will we actively look for others to join us."
McGettigan said he looked forward to bringing his group's expertise, enhanced buying power and product range to the new Londis/Musgrave partnership.
Each Londis shareholder will receive £31,645 as part of the deal, three times the amount retailers would have received had Musgrave's first bid in December last year been accepted. That deal saw most of the £40 million asking price shared between Londis' directors - a factor which led to the original deal being scrapped and the lengthy search for a new buyer.
