Londis fight isn't over, says BFG

THE Big Food Group has written to Londis's 2,000 shopkeeper-shareholders saying that it might still launch a bid -despite the board of the convenience store chain last week recommending a £60m offer from rival Musgrave.

Bill Grimsey, chief executive of BFG, which owns Iceland and wholesaler Booker, said in the letter that he was still interested in the possibility of making an offer for Londis.

Because BFG did not take part in the formal sale process by the Londis board, conducted by adviser KPMG, it is free to approach Londis shareholders direct.

The Co-op, as well as off-licence chain Thresher. did take part in the KPMG process and are barred from talking direct to shareholders, though they could yet table offers for Londis. Other companies that did not take part in the process, but might still bid, include Costcutter, Nisa-Today and Spar.

Musgrave, an Irish-based family company that owns Budgens, had been seen as front-runner to buy Londis after an earlier £40m bid fell apart this year.

The latest offer followed improved trading at Londis, but Musgrave's bid was not the highest. That is believed to have come from Thresher, owned by financier Guy Hands' investment company, Terra Firma.

Because Londis' shareholders will remain customers of the new owner, the price to be paid was not seen as the most important factor by the directors in recommending an offer.

Thresher has recently begun selling convenience food and is keen to expand, but its failure to win Londis is likely to force it to reassess its strategy.

The company is believed to have wanted to beef up its size, partly to make it more attractive to potential buyers or to float on the stock market.

Musgrave's new offer will be put to shareholders in the next couple of months after publication of an offer document within the next few weeks.