Londis shopkeepers vote on bid

LONDIS shopkeepers will today give their verdict on a £60m takeover bid for the convenience stores business. The shopkeepers, who hold shares in the wholesaler and distributor, are to vote on the offer from Budgens owner Musgrave.

If it goes through, the bid will give each of almost 2,000 shopkeepers who own stakes in Londis a windfall payout of £31,000.

Londis said the offer from Ireland-based Musgrave had not been the highest on the table, but would be the best deal for shopkeepers in terms of future trading arrangements.

However, it could still falter in the face of a last-minute challenge from a consortium headed by two retailers.

Lancelot, set up by former directors of corner shop chain T&S Stores, said it had raised its offer for Londis to £63m.

Under the terms of its bid, which replaces a previous £60m offer, Lancelot would buy a 40% minority interest in Londis for £25.2m.

The store owners would retain a 60% majority controlling interest through new Londis shares.

The bid process attracted interest from across the retail sector with approaches thought to have come from the Co-op, Iceland owner Big Food Group and off-licence chain Thresher.

The prospect of a £31,000 pay day will be appealing for most Londis retailers, who are largely independent shopkeepers who have work hard for very long hours.

Londis is the main wholesale supplier to its shopkeepers, so they are its clients. But each has a share in the company and it is that share that shopkeepers are being urged to sell to Musgrave, which already owns Budgens in Britain.

A typical Londis outlet will have a sales area of about 1,100 square feet. It will open at 7.30am - earlier if it also sells newspapers - and will not close before mid-evening. Weekly sales are likely to be about £13,000, including VAT - rather lower if the shop doesn't have a licence to sell alcohol.

On the surface, it is a £670,000-a-year business. But profits are harder to make because margins on the sales are low – as little as 6% on tobacco and cigarettes rising to 22% on confectionery and alcohol.