Budgens bought in £231m deal

IRELAND'S biggest food and groceries wholesaler, Musgrave, today made a recommended 135p-a-share bid for convenience stores chain Budgens, valuing the group at £231.6m.

Musgrave bought a 28% stake in Budgens in August 2000 when the shares were 70 1/2p, immediately boosting them to 81 1/2p as investors guessed its intentions.

Today's offer represents a premium of 18.7% to Budgens' closing middlemarket price of 113.8p on 9 May, the day before the company revealed a bid was in the offing.

Musgrave, founded in 1876, is a private, family-controlled company with 75% of the shares held by the extended Musgrave family. It supplies a network of 560 independent retail franchisees in the Irish Republic and Northern Ireland and last year had turnover of £1.36bn. Budgens operates more than 230 supermarkets and convenience stores in South-east England.

Musgrave managing director Seamus Scally said: 'We are satisfied that Budgens represents the right base from which to develop our position in the grocery retailing market in Great Britain.'

Budgens chairman Clive Clague said: 'We believe this is an attractive offer for Budgens shareholders.'