UK convenience store supplier Londis has announced that it has agreed on a sale of its entire share capital to Irish food group Musgrave.
Musgrave’s revised takeover bid values Londis at around £60m (US$107.1m), with each share valued at £31,266.
“The board of Londis believes that the combination of Londis with Musgrave will provide a stronger competitive future for Londis and its independent retailers,” the company said.
Londis announced earlier this year that it considered it to be in the best interest of all Londis shareholders to align the business with a third party. Londis concluded that the right way forward would be to explore an outright sale of Londis.
Musgrave’s new £60m bid compares with the now abandoned December 2003 proposal under which Musgrave would have acquired Londis for £40m. Under the earlier controversial proposal, shareholders would have been paid £10,139 for each Londis share, and £20.4m would have been paid to the four members of the Londis executive management team. With the new proposal, however, all of the £60m will go to Londis shareholders, who will receive £31,266 in cash for each share, more than three times as much as with the previous bid.
In response to the Londis announcement, the UK’s Big Food Group, which was one of several companies chasing Londis, said it “remains interested in the possible acquisition of Londis and will continue to consider its options in relation to the company”.
Big Food Group said that despite making its strategic case as a potential acquirer and seeking to engage the board of Londis in discussions, the company has not participated in the sale process, “because of the anti-competitive constraints Londis and KPMG sought to impose as a pre-condition to participation”. The company said it had therefore not submitted an offer for Londis.