Union officials have met senior management at retail chain Superquinn after it was confirmed that Musgrave Group has reached an agreement with receivers to purchase the business, securing 2,800 jobs with the group.

Receivers were last night appointed to the retail chain, which has debts of about €400 million.

Musgrave had been one of a number of parties considering a bid for the group. This morning, it confirmed it had reached a deal with the joint receivers to buy the business. The stores will remain open and will continue to trade as normal.

The sale will give Musgrave an extra 6.1 per cent of the grocery market. That will make it the largest player in the market with 27.8 per cent, ahead of Tesco on 27.6 per cent, according to Kantar Worldpanel figures from June 12th.

In a statement Musgrave said the transaction would secure the long-term viability of the Superquinn business and protect jobs.

"Superquinn will remain under the management of the joint receivers pending regulatory approval and the completion of the transaction," the statement said.

Representatives from Mandate met management at 8am. Siptu said it was also seeking an urgent  meeting with the company and would seek to protect the jobs of its members and their existing terms and conditions of employment.

Musgrave also owns Supervalu, Londis and Mace. The sale must be approved by regulators.

Musgrave said it plans to invest in the stores and work with the Superquinn employees to develop the future of the business. Chief executive Chris Martin said purchasing Superquinn, when approved, supported the group’s growth agenda and would sustain its competitiveness.

The joint receivers said in a statement that Superquinn suppliers would be contacted over the coming days.

"The joint receivers will ensure payment for future deliveries for the duration of the receivership and wish to continue trading with all of Superquinn's existing suppliers," the statement said.

A syndicate of banks, including AIB, Bank of Ireland and National Irish Bank, appointed Kieran Wallace and Eamonn Richardson of accountancy firm KPMG to Superquinn, which operates 24 stores, yesterday.

Ibec group Food and Drink Industry Ireland (FDII) claimed up to €100 million was owed tio suppliers, and said it was seeking immediate clarification from the receiver as to whether creditors would be paid in full for goods already provided.

"Failure to pay these companies what they are rightly due will have a disastrous effect on the supply chain and affect the immediate viability of many food companies, placing thousands of jobs at risk. Any resolution must benefit all creditors," said FDII director Paul Kelly said.

In a statement this morning, Mr Richardson said the stores would continue to operate as normal.

"The group, which has been operating in a tough trading environment, has been heavily indebted, primarily due to property related loans," he said.

"Therefore, this receivership, together with the sale as a going concern to Musgrave Group is a positive development for Superquinn, its employees, suppliers and customers. Despite new ownership, there will be no disruption to business for customers and the Superquinn stores will continue to trade as normal."

President of the IFA John Bryan said existing suppliers to Superquinn must be paid in full, and called for a code of practice that would provide equity for primary producers in the food supply chain to be introduced.

He said the code should ensure that below cost selling and other unsustainable practices are outlawed, the provision of a means for the more equitable share-out of the consumer price across the food chain, and an obligation for retailers to report details of profitability and turnover.

"Along with a code of practice, the Government must legislate for an independent ombudsman office, which would have legal powers to demand information from retailers as part of their investigations and provide anonymity and confidentiality to suppliers who make complaints to initiate investigations and have the powers to enforce penalties for non-compliance," he said.

The small and medium business association (ISME) also called for Government intervention.

Chief executive Mark Fielding said the Minister for Enterprise should intervene to ensure that small suppliers are paid for goods supplied to the Superquinn prior to the banks sending in the receiver.

The lobby group also called on new owners Musgraves to "do the decent thing" and pay the suppliers for goods, whether there is retention of title or not.

"While the receivers say that jobs within Superquinn will be saved, there is no mention of the thousands of jobs in the SME sector, which are in jeopardy because of this corporate scandal," Mr Fielding said.

Controlled by the privately owned Select Retail Holdings, Superquinn owed the lenders more than €400 million in mainly property-related secured loans.

The Musgrave Group had sales of €4.4 billion in 2010 and profits of €72 million. Its franchises have more than 20 per cent of the national grocery market.

Select Retail Holdings, backed by property dealers, David Courtney and Bernard Doyle; businessmen Simon Burke, David Cantrell, Kieran Ryan, and property developers Bernard McNamara and Gerry O’Reilly, bought Superquinn from its founder Senator Fergal Quinn and his family, in January 2005 for a reported €450 million.

Mr Burke recently left the company while Mr McNamara exited a number of years ago.

Mr Quinn founded the company in Dundalk in 1960 and the group expanded to encompass 24 stories, with 16 in Dublin and other stories in Kilkenny, Carlow, Clonmel, Waterford, Limerick, Bray, Charlesland, and Portlaoise.

The company competed with larger national and internationally owned rivals by concentrating on the upper segment of the market and focusing on innovations such as loyalty cards and self-scanning.

It was also one of the first supermarket chains to introduce online shopping.

As a privately held company it does not disclose its sales or profit figures.

Sales were estimated to be in the region of €500 million in 2009.

The company’s share of the Republic’s grocery market is said to have fallen from 9 per cent to 6 per cent over the last three years as its customers have shifted to cheaper competitors.

Additional reporting: Reuters