Premier Foods plc has held discussions with private-equity investors in a bid to secure backing for its Hovis bread unit, just-food understands.
The UK food group’s search for investment options for its struggling bread business has resulted in talks with private-equity firms HIG Europe, Sun European Partners and PAI Partners.
According to a Sky News report, the talks are said to be at a “relatively early stage”, and come just three weeks after Premier engaged the services of a financial advisory firm to rescue its Hovis division.
However, a spokesperson for Premier declined to comment on the fresh report.
Last year, it was rumoured the company had appointed Goldman Sachs to assess the potential sale of its entire bread unit. However, the focus has since moved to reducing costs and improving efficiency while also driving sales of its “power brands”.
Its bread sales have come under increasing pressure in a relatively promotional UK bread market. In its most recent quarterly update, Premier said its bread unit saw sales dip 1.5%, again affected by the hot weather.
The company has been restructuring the division in a bid to boost profitability and last year Premier said it would cut 900 jobs, close over 100 distribution routes and revamp its logistics operation. Premier has closed bakeries in Greenford and Birmingham as well as its Glasgow mill this year.
HIG Capital and PAI Partners declined to comment on the reports, while Sun European Partners had not returned a request for comment at the time of writing.