Blog: Premier's latest sale cheers City
Dean Best | 30 October 2012
Premier Foods' latest deal to dispose of a household brand - this time Branston pickle - sent the UK firm's shares soaring today (30 October).
The company announced a GBP93m (US$149.5m) deal with Japanese food group Mizkan - to which it had sold another set of assets, including the Haywards pickled onion brand, earlier this year.
The transaction, which Premier expects to finalise early next year, is the latest the company has completed in the last 18 months or more as it lowers its debt pile and focuses on a select group of brands.
Premier CEO Michael Clarke said the sale would mean it exceeds its target of bringing in GBP330m in proceeds from disposals 20 months before a June 2014 deadline it signed up to under its financing agreements.
Shares in the company, which owns brands including Batchelors soup and Oxo gravy, jumped after the news and were up 6.65% at 108.25p.
Panmure Gordon analyst Graham Jones took a considered view of the sale and of Premier's financial position.
Jones said the deal was worth 1.4x Branston's sales and represented a 7.9x EV/EBITDA multiple for 2011, which, he said, was a "reasonable price" and a "better multiple than previous disposals".
However, he added: "Even after these recent disposals, Premier will remain highly geared and it still has a very large pension deficit which has to be serviced from a smaller cash generative base. For now we stick with our 'hold' recommendation and 90p price target."
Just weeks after announcing a purchasing tie-up in France with local rival Systeme U, Auchan has outlined an international agreement with Germany's Metro Group....
Tesco has reported a massive 92% drop in first half profits as the accounting fiasco continues to widen....
A conference being held in London today is taking on the ambitious topic of agricultural technology and specifically will be looking at the implementation of the UK government's Agricultural Technolog...
As the importance of health has grow in consumers' minds, frozen food has been left out in the cold. But two major manufacturers in the US are looking to heat up the sector by claiming frozen food mea...
- SIAL 2014: Greek yoghurt firm Fage targets Europe
- On the money: Spreads, ice cream top Unilever woes
- Why Nestle is relaxed about the China "drag"
- Focus: Will Danone return to growth in dairy?
- SIAL: French firm Michel et Augustin to enter US
- SIAL 2014: Premier in talks over US manufacturing
- Symington's acquires Tanfield Foods
- Kellogg, Nestle slammed for "chaotic" salt policy
- Heinz silent over Polish factory expansion talk
- Premier cautious on profits after Q3 sales slide