A bid for UK food group Northern Foods from poultry-to-fish supplier Boparan Holdings is “more likely than not”, one leading analyst has claimed today (17 January).

Boparan Holdings, run by food tycoon and Northern investor Ranjit Boparan, has until Friday to declare whether it will make an offer for the Fox’s biscuits and Goodfella’s pizza maker.

Northern is planning to merge with Irish food maker Greencore but speculation has swirled around the market since before Christmas that Mr Boparan could table his own bid for the business.

On 22 December, Boparan Holdings stated it was “at a preliminary stage in evaluating a possible cash offer for Northern”. On 4 January, the City’s Takeover Panel issued a deadline of 21 January to Boparan Holdings to table a bid or walk away.

In a note to clients today, Credit Suisse analyst Charlie Mills indicated that he thought a bid from Mr Boparan was likely.

“We would not expect that Rothschilds – 20 years a Northern Foods advisor – would team up with [Mr Boparan] unless his intentions were very serious. We think a bid is more likely than not,” Mills said.

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“Any bid is likely to be based on a premium to where the shares were before the Greencore merger (46p), and might best be viewed as a cash alternative to that proposal. As such we see any offer being pitched in the 60-65p range. Currently Northern shares trade in this range anyway. The implied merger terms from Greencore are only 49p, though this we suggest has more to do with the market anticipating that no merger will take place, and an offer from Mr Boparan is more likely. We rather agree.”

Mr Boparan, who through Boparan Holdings owns poultry supplier 2 Sisters Food Group and fish-and-chip shop chain Harry Ramsden’s, has built a 6.6% stake in Northern since the company’s merger plans with Greencore were announced in November.

Northern and Greencore have since consistently advocated their plans. Both companies have pointed to the GBP40m in synergies they claim the merger will create and the scale the new business will be able to enjoy.

On Saturday, The Daily Telegraph reported that Mr Boparan was working on submitting a bid before Friday’s deadline.

The newspaper said the tycoon doubted whether Greencore and Northern could extract the GBP40m (US$65.6m) in synergies. 

Mr Boparan was also said to be unhappy with the terms of the proposed merger because it lacks a bid premium, the newspaper said.

Mr Boparan is also said to be unhappy about the lack of food-industry experience on the proposed board of Essenta Foods, the company set to be created should Greencore and Northern merge.