More names emerge in Londis race

The list of retailers lining up to bid for symbol group Londis in the UK just keeps getting longer.

Musgrave, the Irish group which last month made a recommended bid for the chain, is still in contention, as is the Big Food Group whose rival - and, it could be argued, fairer - bid sparked off the whole takeover battle. But the Financial Times today reports that several other well-known groups have expressed an interest.

The Co-operative Group, the UK's biggest convenience store operator after a number of acquisitions last year, including that of Alldays, is said to be interested in Londis, as is Somerfield, the supermarket group which also owns discounter Kwik Save, and family-owned retailer Bestway, according to the FT report.

There is also still speculation that Nisa-Today's, another symbol group, and convenience store operator Spar are about to throw their hats into the ring, while the paper also reports that at least one private individual, already associated with Londis, is thought to be considering bidding.

Musgrave, which owns the Budgens chain in the UK, offered to pay £40 million for the 2000-strong Londis group back in December, but faced immediate opposition from shareholders when it emerged that four Londis executive directors would receive more than half the cash, leaving the company's shareholders - essentially the individual store owners who trade under the Londis symbol - with a pittance.

BFG then made a counter proposal, offering to match the Musgrave bid but pay the lion's share of the cash to store owners rather than the directors, prompting Musgrave to withdraw its original bid. The Irish group has nonetheless reiterated its continued interest in the company.

KPMG corporate finance has been appointed to advise the Londis board on its options.

Apart from Musgrave and BFG, none of the other potential bidders have been confirmed, but the FT reports that a final list of all interested parties could be drawn up as soon as next week. However, a sale is not the only option being considered - a flotation, joint venture and the status quo are all possibilities as well, the report suggests.

But who is the most likely to end up as the winner in this bidding battle? According to retail analyst Bryan Roberts of M+M Planet Retail, some of the bidders have a better chance than others.

"I think that it's important to differentiate between the rivals most able to acquire Londis as compared to the businesses who would make a better job of integrating and running the company," Roberts told FoodandDrinkEurope.com.

"The Co-op and Somerfield are both more than capable of funding the acquisition, but both have minimal experience of wholesaling or running a symbol group. Moreover, Somerfield still has its hands full turning around Kwik Save and the Co-op is busy integrating its various c-store acquisitions. Londis would therefore be an additional distraction that both groups could arguably do without, despite the greater buying power that the deal would give them.

"The other potential bidders cited so far are possibly better positioned to take on Londis, as Musgrave, Big Food Group, Bestway, Spar and Nisa-Today's all have greater expertise in the wholesale/symbol group sphere of grocery retailing. Of these latter groups, BFG possibly has the deepest pockets, so my money's on them at the moment."