CAMPAIGN: Financial PR - Londis shareholders hold board at bay

Campaign: Financial PR Client: Londis Shareholders Action Group PR team: Grandfield Timescale: December 2003 Budget: Around £15,000

When Budgens owner Musgrave put in a £40m bid to buy shopkeeper-owned retailer Londis, a group of nine Londis shopkeepers formed the Londis Shareholders Action Group (LSAG).

The shopkeepers, each of whom is a shareholder in the company, protested about the deal. Under the proposed contract, half the payment would be shared out among four executive board members, while the remaining £20m would be split between almost 2,000 Londis shopkeepers.

Adrian Costain, deputy chair of LSAG and formerly at The Maitland Consultancy, initiated media coverage with a letter to The Times. Grandfield then approached Londis after seeing the piece.

The agency was hired to stir up media interest in the issue two weeks before the AGM at the end of December, with the Musgrave bid on the agenda.

Objectives

To block the Musgrave offer. To change and replace the non-executives on the board. To instigate a strategic review of the options available to the company and to ensure future consultation with shopkeepers over similar offers.

Strategy and Plan

Grandfield wanted to round up support for the shopkeepers at the AGM. It pushed for high-impact national coverage in the hope that this would encourage Musgrave to withdraw its bid. When the PR team learned that LSAG was holding a meeting for shareholders ten days before the AGM, it decided to use it as a news hook. Press releases were sent to all the national business press correspondents, emphasising the 'David and Goliath' aspect of the story.

'We positioned the campaign as an army of small grocers fighting back against corporate fat cats,' said Grandfield managing director Marc Popiolek.

Because the shareholders' discussions at the meeting had to take place in private, Grandfield played a key role in relaying information to journalists as decisions were made. At the end of the meeting, the PR team set up a photo shoot showing the shareholders signing up to join LSAG. Grandfield organised a press conference at a hotel the next day, arranging one-on-one interviews with shopkeepers for reporters from all the major national newspapers.

Generating a lot of publicity in a short space of time and maintaining the campaign's momentum meant the PR team had to vary its approach to the media. Tabloids were given access to different shopkeepers, while broadsheets were targeted with more business-focused information in order to position the campaign within a wider debate about corporate governance.

The team also put radio stations in contact with Londis shopkeepers in their regions for a local angle.

LSAG ensured its members were available to deal with press enquiries and worked with Grandfield to play a responsive PR role behind the scenes.

Measurement and Evaluation

Between the shareholders' meeting on 19 December and the AGM on 30 December there were more than 75 articles in national and regional press.

Broadsheets covering the campaign included The Times, The Daily Telegraph, The Guardian, The Independent and the Financial Times.

Tabloids such as the Daily Mail and regional titles the London Evening Standard and the Manchester Evening News ran with the story. Broadcast interviews featured on Radio 4 and BBC1's Breakfast, as well as regional radio stations.

LSAG phoned 1,400 shareholders and a large majority reported that they had seen the press coverage and supported LSAG's campaign.

Results

Journalists from all the major national newspapers attended the shareholders' meeting and the AGM. Nearly 100 shareholders attended the AGM in support of LSAG, when the attendance is usually fewer than ten. Musgrave dropped its initial bid to buy Londis.

The board decided to initiate a review of its business practices and appointed KPMG to act as an independent watchdog. KPMG recommended that several shopkeepers from LSAG should be appointed to the board.

'Grandfield was very professional,' says The Daily Telegraph City reporter Caroline Muspratt. 'I was grateful for the information it relayed during the shareholder meeting.'

However, LSAG was unable to force the non-executive board members to resign. After the campaign, LSAG again took up responsibility for its proactive PR strategy, with Grandfield continuing to act as a press office.

Londis is now looking at offers from rivals, said to include Big Food Group, the Co-op and Somerfield (PRWeek, 16 January).

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