Former Market Basket president Arthur T. Demoulas offered to return the crippled chain to normal operations Sunday night by resuming control of the business while he continues to negotiate to buy the company from rival family members.
The move came just hours before a deadline the company had set for employees loyal to Demoulas to return to work or risk being fired and replaced. It was not immediately clear whether the offer was part of a strategy to help spare those workers.
In a brief and oblique statement, the ousted head of the family grocery empire said that he has offered to “move immediately to return to work” and rehire top managers who had been fired for organizing the remarkable protest on his behalf. He said his goal is to “stabilize and begin to restore the business.”
The move offered a glipse into intense negotiations between Demoulas and his cousin and main rival, Arthur S. Demoulas, as the former president attempts to buy out the half of the multibillion-dollar chain that is held by Arthur S. and his family. The timing of the offer seemed designed to ratchet up pressure on rival shareholders to take action by offering himself as an immediate solution to the company’s rapidly crumbling fortunes.
Arthur T.’s statement made clear that the negotiations are not just focused on financial terms, but also on what role he would play and the timing of his return.
In its own statement Sunday night, the board dismissed Arthur T.’s offer to immediately return to the company, and reaffirmed its support for the current co-chief executives, Felicia Thornton and James Gooch, who it named to replace Arthur T.
“Demoulas Market Basket is considering strategic alternatives directly with parties in private conversations,” the statement said. It encouraged minority shareholders, including Arthur T., to “continue providing constructive proposals.
“Following the board’s evaluation of all of offers, it will convey its recommendations to the company’s shareholders who have the final decision as to which strategic alternative, if any, to accept.”
The board, whose majority is controlled by Arthur S., has continued to support Gooch and Thornton in recent weeks, even as employees loyal to Arthur T have refused to work for them, leaving stores devoid of fresh food and normal customer traffic.
Arthur T.’s statement said that his side of the family has “been working around the clock to pursue their offer to buy the 50.5% of shares in [Demoulas Super Markets] they do not own for a full and fair price.”
While expressing hope the crisis would be resolved, his statement called it “critical” that the company’s board accept his offer, warning, “time is of the essence.” He offered to return by midnight Sunday, bringing back his entire team.
The move by Arthur T. seemed to be an attempt to avoid an ugly showdown between the new executives and the thousands of protesting employees.
Making such an offer public is a gamble, said David Lewin, a professor of management at the University of California, Los Angeles.
“He’s trying to put pressure on the other side. It’s a tactic,” Lewin said. “It may work, but it may not.”
But former employees applauded the move.
“He’s doing that out of compassion for us, I’m sure,” said Steve Paulenka, a top Market Basket supervisor who was among eight employees fired in July. “I would not be that magnanimous if I were in his position.”
The company’s directors have acknowledged that Arthur S. is considering selling his ownership stake to Arthur T., but it is unclear how likely he is to do so.
In the meantime, the grocery chain, which industry specialists estimate is worth $3 billion to $3.5 billion, remains crippled. The shelves at many of the chain’s 71 stores are bare because workers have refused to deliver goods. And customers, either in solidarity with workers or out of frustration with missing grocery items, are largely staying away. As a result, managers have said, sales at some stores have plummeted as much as 75 percent since Demoulas’s firing.
Store managers loyal to Arthur T. said they hoped the offer was a signal that behind-the-scenes negotiations are leaning Arthur T.’s way.
“We all fully believe that Arthur T.’s going to be running this company again,” said John Garon, a manager at the Burlington Market Basket. “He continues to give full and fair offers to the other side of the family. He’s saying, ‘Hey, I’m ready to go back tonight and fix the big mess you guys said I created.’ It would be the best-case scenario for all involved.”
But Garon cautioned that undoing the damage of the past month would not happen overnight.
“There’s a lot of work to do first,” he said. “If we hear the news, we’re going to have more work to do than we’ve ever had in our lives to get our stores up and running and full.”
Paulenka said he would not declare victory until a sale to Arthur T. was finalized, but he and other fired managers said they were ready to return to work immediately.
“When and if that word comes, I’m ready at a moment’s notice,” said Tom Gordon, a former grocery supervisor who was fired by the company’s new leaders.