Blog: Dean BestPremier'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."


BLOG

Cargill snaps up ADM's chocolate business

Five months after Cargill's rumoured interest to buy Archer Daniels Midland's cocoa and chocolate businesses came to nothing, the company today (2 September) announced a deal for part of the assets....

BLOG

UK health leaders say obesity threat "severe", call for "emergency task force"

UK health leaders have called for an "emergency task force" to tackle the childhood obesity crisis in the country as, for the first time, they are faced with a generation of patients "who may predecea...

BLOG

Hillshire CEO Connolly bids farewell as Tyson sale sealed

Tyson Foods has completed its US$8.55bn acquisition of Hillshire Brands, with shares in the Jimmy Dean sausage maker delisted before the market opened today (29 August) - and its CEO leaving the busin...

BLOG

Progress at Synlait but challenges remain

New Zealand dairy group Synlait Milk revealed today (28 August) it has hit the "major milestone" of receiving regulatory clearance to begin exporting finished product from its new NZ$28.5m dry blendin...

just-food homepage



Forgot your password?