Row growing over Londis deal

MUSGRAVE'S £40m takeover of convenience store chain Londis is not proving as easy as it first thought. The Irish food group faces a potential counterbid plus mounting shareholder anger that Londis directors are keeping £20m for themselves.

Nisa-Today's, which buys products for small retailers and wholesalers, is trying to raise funds to scupper the Musgrave bid.

A Nisa spokesman said 'a subcommittee will be formed to explore opportunities'. Nisa-Today's retail members include Londis and Musgrave's chain Budgens. The group's collective sales are £15bn.

Londis chief executive Graham White - who is under fire for lining his own pockets - is a part-time director on the Nisa board. He will be excluded from the deliberations.

Some think Nisa will try to structure a deal that stops Londis directors from pocketing half the proceeds. Londis is owned by its 1,956 shopkeepers who each paid £50 for one share in the business.

They would have made £20,000 each from the sale, but will get only £10,000 because of an arrangement to give 51% of the company to four Londis bosses in the event of a takeover. This was approved by Londis shareholders, though many shopkeepers say they were unaware of the deal.

If the Budgens deal is approved on 30 December, White stands to get £6.8m, Andrew Wallace and Terry Bedford would receive £4.8m and Denise Buller would collect £4m.

The four are also sharing a further £7.1m in return for reducing the length of their contracts. This was approved by chairman Peter Williams and non-executive directors Alan Heasman, Daniel Driscoll and Bharathari Patel.

Londis points out that all shareholders will still get £10,000. 'This is 200 times their £50 investment,' a spokesman said.