Business Opinion/John McManus: It may not be It's A Wonderful Life, but the failed bid by Musgrave for Londis in the UK is, in its own way, a Christmas parable.

Equally, the chairman of Musgrave, Mr Eoin McGettigan, is not Jimmy Stewart, but he too must be wondering where it all went wrong. Instead of getting a great big present in the form of Londis, he is left looking like a pudding this holiday season.

The answer, of course, is greed. Not on the part of Mr McGettigan or Musgrave which is accepted to have offered a fair price, but on the part of the Londis management.

Under the terms of the deal - which unravelled so spectacularly last week - the four managers of the 2,000-strong chain would have shared about €30 million, or over half of the €57 million paid by Musgrave. In addition, two of the senior Londis executives, including chairman Mr Graham White, had just received about €10 million for agreeing new contracts. Under the terms of the contracts the four managers control 51 per cent of the firm in an acquisition situation, which entitled them to 51 per cent of the acquisition price.

The payout to the 1,933 shopkeepers who make up the chain would have been a modest €14,741 each.

There was some understandable grumbling from small shareholders over the last few weeks, but every thing was going swimmingly until a rival bid was mooted on Thursday by The Big Food Group (BFG). It offered to double the small shareholder's payout to around €30,000, while cutting management's share to just under €1 million.

The Londis board withdrew its recommendation of the Musgrave offer on Friday and announced it was open to further offers. What forced the board rethink was a combination of external and internal pressure generated by the extent to which the deal favoured the four senior executives.

As well as approaching the board of Londis, BFG made its case directly to the shopkeepers, writing to them and highlighting the extent to which the benefits of the deal were skewed towards management. External pressure came from the media, never happier than when exposing what they consider to be corporate greed.

Where things go from here is unclear. The BFG bid may win the support of shopkeeper shareholders but management can still block it. The same applies to any other bid that might emerge. There are signs, however, that the directors might accept less than they are theoretically entitled to in order to facilitate a deal.

It is no comfort for Musgrave, which has withdrawn its bid and must now decide if it wants to get involved in what looks like becoming an auction process in the new year.

The indications last Friday were that Musgrave would stay in the race.

Whatever Musgrave decides to do next, the Londis debacle raises questions for the Cork-based group which is one of the country's most highly regarded private companies.

Better known as the owner of the SuperValu and Centra franchises, it prides itself on being an exemplary corporate citizen, with its family-owned ethos and history of pioneering the concept of voluntary group retailing.

The most interesting question is how Musgrave thought a deal so manifestly unfair to so many shareholders would ever fly. The second is how an organisation that styles itself as the mothership for the independent retail sector could go along with a deal which was less than generous - to put it mildly - to the small shopkeepers of Londis.

Only Musgrave's management know the answers to these two questions and they are clearly alive to issues of incompetence and a certain type of hypocrisy that they raise.

The statement issued by Musgrave on Friday when it withdrew its bid does seem to be an attempt to address these types of issue.

In the statement Musgrave pointed out that the deal was recommended by the independent directors of Londis and was "implemented in line with the contractual obligations and structure of their company".

The statement also points out that Musgrave did not "have the opportunity to negotiate any alterations to the legal arrangements of Londis's executive team" and then goes on to add that it was precluded from communicating directly with Londis shareholders because of a confidentiality clause.

It also points out that the talks - instigated by Londis - opened in early 2003, which would seem to pre-date the renegotiation of the management contracts to give them a big payout in the event of a sale.

The statement goes on to quote from a letter being sent by Mr McGettigan to Londis shareholders which alludes to the company's "125-year heritage of supporting and working in partnership with independent retailers".

The letter and accompanying statement are presumably intended to reassure the Londis shareholders that Musgrave might have done things differently had it had the chance and what transpired was not a simple case of a takeover in which the acquirer was happy to go along with a deal that favoured management in order to get its hands on the business.

This is clearly the tack that Musgrave must follow if it is to have any chance of winning the coming auction.

But the suspicion must be that the damage is already done as far as Musgrave is concerned in the eyes of the small Londis shareholders.

And one cannot help wondering if the group might not be better off turning its attention instead to some domestic damage limitation.

Without a doubt the Londis debacle - and the attitude of Musgrave to the shopkeeper shareholders in Londis - will have been watched with interests by the operators of Ireland's 211 SuperValus and 320 Centras.