Musgrave Group offers £175m to acquire Budgens

Musgrave Group, Ireland’s largest food distributor, has announced a £175million (275 million euro) offer to buy up the remaining shares in Budgens.

The agreed deal will see Musgrave offer of 135 pence (Sterling) per share to the shareholders of Budgens to acquire the outstanding shares in that company that it does not already own.

The independent directors of Budgens have unanimously recommended their shareholders to accept the offer.

Musgrave Group has also received indications of intent to accept the offer from institutions in respect of approximately 25% of the issued share capital of Budgens. An offer document is being sent to Budgens shareholders and the offer will then initially be open for 21 days, following which the level of offer acceptances will be reviewed.

Commenting on the offer, Hugh Mackeown, Chairman, Musgrave Group said: “Musgrave Group has made this step as part of its long-term strategy to expand its presence in the UK. Budgens has continued to perform well since our initial investment in August 2000. The Musgrave and Budgens management teams have collaborated on a number of successful initiatives that have had mutual benefits.

“The offer values the outstanding shares in Budgens, which Musgrave does not already own, at Stg£175 million (€275 million) and the fully diluted share capital of Budgens at approximately Stg£315.6 million (€492.8 million).

“This offer represents a premium of 28.2 per cent on the average price of Budgens shares in the six months prior to the 9th May 2002, the last business day prior to the date on which Budgens announced it had received an approach from Musgrave Group. It also represents a premium of 18.6 per cent to the closing middle market price of Stg113.8 pence per Budgens share on the same date”.

Seamus Scally, Group Managing Director, Musgrave Group, commented: "The Musgrave Board is fully committed to the further growth and development of Budgens and believes that this can now best be achieved with Budgens as an autonomous operating division within the wider Musgrave Group.

"The Board of Musgrave firmly believes that this Offer, which has the unanimous support of the Independent Directors of Budgens, represents an attractive exit opportunity for Budgens shareholders."

The offer will be financed by a consortium of Banks including Barclays Bank, AIB Bank, Bank of Ireland, IIB Bank and Ulster Bank.

(SP)