Ranjit Boparan, the food tycoon rumoured to be ready to move for Northern Foods, has reportedly struck a deal with the UK group’s pension trustees, ahead of today’s deadline for a takeover bid.
The agreement, reported in The Daily Telegraph, seemingly removes a potential obstacle from an offer from Mr Boparan for Northern, which is planning to merge with Ireland’s Greencore.
Mr Boparan, who owns UK poultry-to-fish supplier Boparan Holdings, has built a 6.6% stake in Northern since the company’s plans to combine with Greencore were announced in November.
Rumours that Mr Boparan could make a bid for Northern emerged in the wake of the announcement of the merger plans and, in the days before Christmas, Boparan Holdings confirmed it was studying whether to make an offer.
On 4 January, the UK’s Takeover Panel issued Mr Boparan with a deadline to make a bid or walk away. Since then, speculation has centred on whether Mr Boparan could secure agreement with Northern’s pension trustees. Under their plans to merge, Northern and Greencore had agreed to make annual payments of GBP15m (US$23.9m) to reduce the UK firm’s GBP142m pension deficit.
Northern and Greencore have consistently talked up the benefits of their proposed merger, including the claim that the combined business would enjoy annual synergies of GBP40m.
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Mr Boparan is said to have doubted that the combined company, to be called Essenta Foods, could enjoy those cost savings.