Irish food group McCambridge has threatened to cool its interest in UK baker Inter Link Foods.
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McCambridge, which owns almost 9% of Inter Link, earlier this month made an approach to buy Inter Link, which is in the middle of a business review following losses over the last 12 months.
However, talks between the two companies have stalled over a confidentiality agreement. A source familiar with the situation told just-food yesterday (21 May) that McCambridge has yet to sign a non-disclosure agreement.
Such an agreement is often signed by parties set for takeover talks to protect financial information on the takeover target from being made public and is made before due diligence can begin. The need for the agreement is all the more pertinent given the competitive relationship between McCambridge and Inter Link.
However, McCambridge today accused Inter Link of adopting an “unreasonable stance” towards the negotiations and access to the company’s books.
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By GlobalDataInter Link has issued two profit warnings so far this year. In a trading statement issued last week, the company admitted that there has been “no material change” since its last update in March, when it forecast a loss for the year ending 5 May.
McCambridge has pointed to Inter Link’s less-than-healthy financial condition and argued it is “surprising” that it is not being blocked from gaining access to Inter Link’s books.
“In these circumstances, McCambridge is considering whether it should withdraw its initial approach until such time as the board of Inter Link is prepared to confirm that it will allow McCambridge direct access to its lenders as a vital part of its due diligence,” McCambridge said.
However, other trade and private equity groups are understood to have declared an interest in Inter Link, which is also considering an equity fundraising to revive the company.
Inter Link has said it would cut GBP2m (US$3.9m) in costs from the business and has identified more savings under a review headed by recently installed chief executive Ian Croxford.
Some 120 jobs have already been lost at Inter Link, which operates from 12 bakery sites in the UK, and another bakery in Poland, and more could follow.
