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March 7, 2019

‘Bids for Tip Top ice cream due in next week’

The race for Tip Top, the ice-cream business of dairy giant Fonterra, is to reportedly move to the next stage next week.

By Dean Best

Bids for Tip Top, the ice-cream business of dairy giant Fonterra, are reportedly due to be tabled next week.

The Australian Financial Review said today (7 March) offers for Tip Top, which Fonterra put on the block in December, are expected to come in on Monday.

The newspaper reported last month Tip Top had attracted early interest from private equity.

In the report today, The Australian Financial Review said Australia-based buyout house BGH Capital had hired advisory firm KPMG to advise on whether to bid. Another fund, Quadrant Private Equity, is working with fellow adviser PwC, the report said.

A third private-equity firm, Pacific Equity Partners, is also thought to be weighing up a move for Tip Top. Pacific Equity Partners owns Australia-based frozen-foods business Patties Foods.

The newspaper said R&R Ice Cream is “also in the mix”. R&R Ice Cream is part of Froneri, co-owned by its private-equity backer PAI Partners and Nestlé.

Last week, Fonterra issued a profit warning, citing “challenges” within its Australian ingredients business, its foodservice operations in Asia and trading conditions in Latin America.

In September, Fonterra announced plans to carry out a major review of its business after recording its first-ever annual loss. Since then, the cooperative has offloaded a livestock unit and announced the plans to sell Tip Top.

On Wednesday, the New Zealand-based dairy group appointed Miles Hurrell, who has been its interim CEO since August, to the top spot on a permanent basis.

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