UK convenience store operator Budgens PLC has received a buyout approach from its largest shareholder, privately held Irish food group Musgrave.

The news prompted an immediate 12% hike in Budgens’ share price as the market reacted positively to the news. This initial may well lead to takeover offer, Budgens said.

Musgrave owns the SuperValu and Centra supermarket operations in Ireland and already holds some 28% of Budgen’s shares. The Irish group also has convertible loan stock which takes its holding in Budgens to around 45% of the fully diluted share capital.