Londis shareholders demand cull of board

Shareholders in Londis, the convenience store network, yesterday demanded a clear-out of company's boardroom as they gathered support against a takeover that would allow its four executive directors to pocket £20m.

About 65 Londis shareholders turned up at a school hall in Neasden, North London, yesterday afternoon to discuss the crisis at the company. At a heated meeting where a number of shareholders vented their feelings on what they see as management greed in deciding who will buy the company, a shareholder action group was created, to be chaired by Kishor Patel, who owns a Londis shop in Bedfordshire. They called on the four non-executives to resign.

Londis's current non-executives are Peter Williams, the company's long-standing chairman, Bharat Patel, Alan Heasman and Daniel Driscoll. They were set to receive £75,000 each if an offer for the company from the Musgrave Group had been accepted. The action group wants to put forward Adrian Costain, one of its shareholders, as candidate for a replacement chairman.

A Londis spokesman said yesterday: "Mr Costain and his committee have an early opportunity to join the other Londis shareholders at the 2003 annual general meeting next Tuesday when they will be able to raise the composition of the board as they would any subject. Their views will have equal weight."

The Londis board had agreed to a £40m takeover by Musgrave, the Irish retailer, two weeks ago. But the payment of £20m of the £40m to the company's four executive directors provoked outrage among the shop owners that make up the company. The company has 1,956 individual shop owners, each holding one share.

The board has now backed away from the Musgrave offer and has opened up an auction process. The Big Food Group, which owns the high street chain Iceland, has shown its intention to bid for Londis and has offered to give the lion's share of the proceeds to the shareholders.

It is understood that the Londis executive directors may eventually agree to back down on their payout awards, which entitle them to 51 per cent of the value of the company after a change of control.