Sale of BWG's Belfast subsidiary founders as price proves a problem

The sale of BWG's Belfast-based subsidiary J&J Haslett to rival food distributor Henderson has broken down after the sides failed to agree a price.

BWG said it had rejected Henderson's offer for the Haslett business because it was "unacceptable" on both price and conditions. Neither side was prepared to discuss the precise terms of the deal.

The sale process began in May with an approach from Henderson, which holds franchises in the North for Spar, Vivo and VG stores.

Haslett operates the competing Mace, Nearbuy and XL Stop franchises, as well as Holmes Cash and Carry, Holmes Vending and Holmes Catering Services. The firm has an annual turnover of some £200 million (€289 million), while Henderson has turnover of about £250 million.

Executives at Henderson were unavailable for comment on the unsuccessful bid yesterday, but a spokesman said the company had agreed to move away from the process after "a lengthy and detailed period of due diligence".

When the deal was first mooted in May, completion had been expected within three months. The spokesman said Henderson was still focused on a combination of organic growth, investment and strategic acquisition, if such opportunity arose.

J&J Haslett was no longer a target, the spokesman confirmed. He underlined Henderson's continued commitment to independent retailing.

BWG, which has sold three food distributors in Britain since the company was bought out by management last year, said meanwhile that the Haslett business was not on the market.

The company's chief executive, Mr Leo Crawford, said senior management within both BWG and Haslett would now focus on "devising a strategic plan" for the development of the business.

"We will in due course share our plans with staff, customers and suppliers," he said.

In May, BWG said it was planning a 200 million expansion in the Republic under which 100 stores would be opened by the end of 2005.

The firm already oversees about 400 Spar outlets. It completed the acquisition of Galway-based food distributor, Tolan Foodservice in July.