The Big Food Group said it intends to make an offer for convenience store co-operative Londis Holdings, should the bid by Musgrave be rejected at the Londis EGM on December 30th.
Big Food said that, under its proposal, Londis storeowners would receive a total consideration of £39.7 million sterling compared with £19.8 million from the Musgrave offer.
Londis's 1,956 store owners, who buy their goods from the Londis co-operative, are reportedly furious about the level of the payout to the group's four directors under the Musgrave proposal.
More than 489 store owners need to vote against the proposal in order to block it. Big Food said its overall offer, which would be worth £40.3 million, would give Londis management just £0.6 million, whereas Musgrave's £40 million offer gives storeowners £19.8 million and management £20.2 million.
Big Food said its proposal follows "a review of the opportunity to accelerate its delivered wholesale strategy through the acquisition of Londis".
It anticipates that any offer would be financed through bank debt using existing facilities.
Big Food added that the acquisition of Londis would bring annual sales of around £500 million of sales to the group and would be earnings enhancing in 2004/05.
Big Food chief executive Bill Grimsey said Londis store owners can double the money they will get under the proposal while benefiting from being part of the Big Food Group.
"We strongly urge them to reject the Musgrave offer that gives £20.2 million to just four members of the Londis management team," he said.
The co-operative achieved sales of £510 million last year and an operating profit of £3.8 million.
