Food store chain Budgens is to be bought by Irish food and grocery group Musgrave in a £231.6 million deal, it was announced today.

The privately-owned Irish group, which bought a 28 per cent stake in Budgens two years ago and made an approach for the group in May, is to pay 135p cash for each Budgens share.

Musgrave managing director Seamus Scally said: "We have come to know Budgens and its management well since the acquisition of our stake in August 2000.

"We are now satisfied Budgens represents the right base from which to develop our position in the grocery retailing market in Great Britain."

Mr Scally said he planned to continue building Budgens organically and had no plans to change the Budgens name or cut staff.

Budgens, which was founded in 1872 when John Budgen opened the first store in Maidenhead, employs 6,000 staff and has 225 stores, mainly in the south and east of England.

In Sussex, it has branches in Haywards Heath, Billingshurst, Hassocks and Henfield.

Mr Scally said: "We plan, in conjunction with the existing management team, to build on the success they have achieved."

Musgrave owns 200 SuperValu and 365 Centra supermarkets and convenience stores in the Irish Republic and Northern Ireland.

Shares in Budgens jumped eight per cent, up 9.75p to 133.75p, in early trading.

Non-executive chairman Clive Clague said: "We believe this is an attractive offer for shareholders. As part of a larger group with a strong reputation for its product offering, Budgens will provide continued stability for employees and further development for its customers."