Arthur T. Demoulas makes offer to buy Market Basket
Arthur T. Demoulas on Wednesday said he will make an offer to buy the Market Basket supermarket chain, seeking to regain control of the fractured company and end the decades-long family feud that has exploded into an extraordinary public spectacle this month.
Demoulas said in a statement that he and his side of the family will try to buy the 50.5 percent of Market Basket now controlled by opposing relatives who supported his firing last month as president of the company.
"We believe that our offer is a very full and fair one and should meet or exceed a seller's expectations of the value of the company," the statement said. "We care deeply about Market Basket and all of our associates and we want to work together to return the company to its successful model for serving our loyal customers. Those who received the offer need to consider the matter, so we are not in a position to comment further at this time."
The value of Demoulas's offer was not disclosed. But the value of the entire private company was estimated at $3 billion to $3.5 billion by Kevin Griffin, publisher of The Griffin Report of Food Marketing.
It was not immediately clear whether the offer was being seriously entertained by family shareholders who have battled with Demoulas for control of the company since the early 1990s. Those shareholders could not be reached for comment Wednesday evening.
The Demoulas offer marks a dramatic turn in a series of events that began in late June, when a board of directors led by his cousin, Arthur S. Demoulas, fired him and took control of the business. Arthur T.'s termination provoked repeated protests by employees and customers loyal to him. Eight employees were fired and others have refused to do their jobs, leaving Market Basket stores unable to stock their shelves in recent days.
But Arthur T. has largely been a spectator since his firing. In addition to the rallies, thousands of people have signed online petitions supporting him. Dozens of politicians in Massachusetts and New Hampshire have urged a boycott of the company in protest of the damage being done to its employees and customers.
In recent days, Market Basket's new cochief executives have sought to stanch the loss of business by urging the chain's 25,000 employees to call off their protest and return to normal operations. The disruptions have caused many customers to shop at competitors because of Market Basket's empty shelves or anger over the decisions of its management.
Arthur T. spoke for the first time since his firing earlier this week, urging the company's management to reinstate the eight employees who were fired for organizing protests on his behalf. He told The Boston Globe that it has been painful to see the stores he labored over for years running out of food. The produce, meat, and seafood aisles in some stores are empty.
"This company is my passion," Demoulas said then. "It's the life's work of my dad and myself and a lot of other people. We're very proud of what we've built together and of the culture that we've established."
If successful, Arthur T.'s bid could put him back in charge of the popular chain of stores and end years of familial infighting. It could be some time before a deal is finalized, a process certain to face obstacles given the controversy that has enveloped the company in recent days.
Arthur T. announced his offer late Wednesday night, after yet another day of scattered protests at stores throughout the chain. Talks over one side buying the other out have come and gone repeatedly over the years and have even spawned lawsuits between relatives. The result has always led back to the same stalemate, with neither side gaining the upper hand.
But Arthur T.'s new offer comes under more pressing circumstances, as the company faces the loss of substantial business due to the employee protests and organized boycotts. The company's board was scheduled to meet on Friday, but it was unclear whether the offer would be discussed.
Employees who had protested Arthur T.'s dismissal said they were hopeful the new offer would bring the former president back to the company.
"This is what we had hoped all along — that he would try to buy out the other half and we'd be done with these people all together and then we'd get back to work," said Tom Gordon, a grocery supervisor who was fired on Sunday.
John Garon, a manager at a Market Basket in Burlington, also called it "excellent news" and the "dream scenario."
Steve Paulenka, the facilities and operations supervisor fired Sunday, and also a main organizer of the protest, said he had hoped the campaign would force the two Arthurs to find common ground. He took Arthur T.'s bid as a sign that perhaps an end is in sight.
"I would welcome that resolution," he said.
Despite the years of drama — marked by expletive-laced board meetings — the chain has prospered.
Today, Market Basket operates 71 stores and has about 25,000 employees in Massachusetts, Maine, and New Hampshire.
It is reported to have had revenue of $4.6 billion in 2013 and was ranked by Forbes as the 127th largest private company in the United States.
The origins of the family feud date to the early 1970s, when George Demoulas, one of the company founder's two sons, died of a heart attack. His children, including Arthur S., later accused George's brother, Telemachus, of stealing their shares in the company — allegations that would eventually embroil the family in a bitter lawsuit in the 1990s.
Telemachus was found liable for having defrauded family members out of their shares, but the court decision divided the company between the two warring factions. That left his son, Arthur T., and George's son, Arthur S., to continue to battle over control of the company for much of the last three decades.
At first, Arthur T. had the upper hand because one member of Arthur S.'s family members defected and voted with him in board elections.
But that changed last year when the same family member, Rafaele Evans, switched her vote to Arthur S., giving his side of the family control. In late June, the board led by Arthur S. fired Arthur T. as president.