Premier Foods has reportedly hired bankers at advisory firm d’Angelin & Co. to explore what might amount to asset disposals after the UK-based food company pulled the plug on the sale of its Ambrosia brand.

Investors in London-listed Premier have been pushing for the company to trim its portfolio of brands, which includes Batchelors soups and Angel Delight desserts, to drive growth in more profitable areas of the business and reduce a bloated debt pile.

The Press Association said it understands Premier has hired d’Angelin to help manage the process of breaking-up the group, reportedly under the behest of Paulson & Co., the food giant’s third-largest shareholder after Japan’s Nissin Foods and Oasis Asset Management. Some of those activist investors now have representatives on the board following heated debates over the company’s leadership and strategy.

Some brands in Premier’s asset chest are considered as legacy brands that could be for the chopping block amid a strategic review launched in February, when the company cancelled the sale of Ambrosia because it could not get a “satisfactory financial outcome” from a deal, presumably meaning interested bids were too low.

The Mr Kipling cakes and Sharwood’s sauces owner is saddled with around GBP500m (US$651.5m) of debt, which former chief executive Gavin Darby had succeeded in bringing down from close to GBP1bn during his tenure until he stepped down last year under pressure from shareholders. The company is still looking for his replacement, with the CFO holding the reins for the time being.

Sky News had speculated that Giles Turrell, the former CEO of breakfast-cereals maker Weetabix, might have been in line for the job, but the same media outlet has since said he has taken a job elsewhere.

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By GlobalData

But any potential asset disposals also need to take into consideration Premier’s large pension fund liabilities.

The Press Association claims so-called “insiders” believe that while all options are on the table, including an outright sale of the business, a break-up is the most likely.