Board mulling Arthur T. Demoulas' buyout bid, says former CEO 'helped to create' company's woes
METHUEN, Mass. -- Market Basket's board of directors continues considering multiple bids for the grocery chain, it said Tuesday, as shoppers continued bypassing its stores, and employees picketed for a 12th day.
The board did not offer a timetable but said it is still considering multiple offers. It also offered a jab at Arthur T. Demoulas, the former CEO who is attempting to buy out the company.
"While Mr. Demoulas' offer provides a path toward solving many of the problems he has helped to create, it is but one alternative among the options the board is considering," the board said.
The board called the bid-review process "rigorous and active." It also denied some reports that surfaced Tuesday that said Demoulas was the only remaining bidder for Market Basket being considered by directors.
Demoulas said last week that he made an offer to buy the 50.5 percent of the company that his side of the family does not own.
Since Demoulas was fired as CEO on June 23, the Tewksbury chain has been in turmoil as employees demand their old boss back.
The board has said it will consider Demoulas' offer and make a recommendation to shareholders, but added Tuesday that it cannot force shareholders to accept any offer.
Demoulas and his side of the family have been fighting on and off for about four decades with the other branch of the family, associated with his cousin, Arthur S. Demoulas.
The two Arthurs' fathers ran the business together for years. Arthur T.'s father, Telemachus, took over the company after George, Arthur S.'s father, died in 1971.
Anything other than a sale of the company to Arthur T. could be disastrous for Market Basket, said Scott Latham, a strategy professor in UMass Lowell's Manning School of Business.
"Any other outcome would tear this company apart," Latham said. "If Arthur T. doesn't get this company, I think at some point you'll see a level of emotion come into this that would tear the company apart. And that is so sad."
Arthur T. would almost certainly have to overpay for the company, which has lost value over the last nearly two weeks, Latham said. Employees would also not likely want to work for any other owner, especially when knowing Arthur T.'s bid would have been passed over, he said.
"The degree of uncertainty is so high for any other bidder," Latham said. "Even if you came in and said it's a great bid, great employees, great customers, even given that, the uncertainty associated with how employees would respond to new ownership, it's unpalatable.
"You could never make a prudent investment given that level of uncertainty," he said.
Demoulas' offer price has not been disclosed, but the company has more than $4 billion in sales, and Kevin Griffin, editor of the supermarket industry publication The Griffin Report, estimated the company's value at $3 billion to $3.5 billion.
For Arthur T., who worked for the company for more than four decades and led it for six, even overpaying might be attractive, Latham added. He compared it to someone spotting his first car in a scrap yard: It might not run well but it has sentimental value no one else would see.
"It's really left only one bidder," he said, "and it's Arthur T."
Outside the Market Basket store at Stadium Plaza in Tewksbury, workers said they've seen a ton of rumors about the situation on the Internet. Employee Michelle Fisette chuckled that she even saw one rumor that Donald Trump was interested in buying the chain.
"There's just so many rumors," said her co-worker, Tyler Boyle.
Both women said they rely mostly on information passed along to them by their manager.
Boyle, Fisette and co-worker Conor Keilty said the rumors don't really affect their plans for working and protesting, though, because they will be sitting in front of the store holding signs until Arthur T. returns.
"Unless Artie T. is back and in business, we're here for the long haul," Keilty said.
Market Basket's empty stores have created a windfall for its competitors, including Stop & Shop, Shaw's and Hannaford.
Maine-based Hannaford said Tuesday that it has brought in extra help for its busiest stores. Spokesman Eric Blom said the chain wanted to make sure its stores have adequate coverage but declined to give details, such as how many stores were being given extra staffing or where.
Shaw's and Stop & Shop did not provide details on whether they've been moving workers around for extra staffing.
The Market Basket boycott has sent so many shoppers elsewhere that Market Basket in recent days has had to donate unused bread and other items to the Greater Merrimack and Greater Boston food banks, among others.
Meanwhile, an investigation is ongoing into potential workplace safety hazards at the Tewksbury Market Basket warehouse.
The Occupational Safety and Health Administration began the inspection after it received a complaint on July 18 -- the same day workers began walking out on the job in protest against the firing of Demoulas. The investigation is attempting to determine whether there are any safety standard violations, OSHA spokesman Ted Fitzgerald said.
OSHA was not able to give specifics of what type of hazards are alleged.
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