Musgrave, one of the suitors for the Londis chain, has said it is moving its Budgens store chain to a franchise-only operation.

Insider believe this could increase its chances of clinching the Londis deal, by convincing the small businessmen who run Londis stores that Musgrave’s strategy is the best one for them.

The Irish retailer is still regarded as the favourite to acquire the business, but any sale is likely to need approval from 75 per cent of shareholders.

Eoin McGettigan, executive chairman of Budgens UK, said that Budgens had a strategy to grow to 500 stores. He said: “Our store portfolio has performed very strongly over recent years, but we believe the stores will perform even better for our customers and be more responsive to the communities they serve if owned and operated by independent franchise holders.”

Londis previously rejected a £40 million bid from Musgrave in December. As well as the Irish retailer, the chain is believed to being stalked by interested parties including Big Food Group and Somerfield.

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