Premier Foods plc has refused to comment on rumours that it is selling its Hartley’s jams and Haywards pickles businesses as part of its bid to bring its debts under control.
Reuters, quoting people familiar with the situation, yesterday (9 January) reported that debt-laden Premier is selling the two businesses for around GBP200m (US$308m).
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A spokesman from Premier said today: “This has been speculated about since October, when the company set out its strategy. There’s nothing else to say I’m afraid.”
Under new CEO Michael Clarke, the company is focusing on eight of its biggest brands while selling off other businesses. In December, Premier sold its Chivers, Gateaux and McDonnells brands in Ireland to Boyne Valley in a EUR41.4m deal (US$52.9m). Earlier that month, it sold its under-performing Brookes Avana own-label subsidiary to 2 Sisters Food Group for GBP30m.
Graham Jones, an analyst at Panmure Gordon, said a sale of Hartley’s and Hayward’s, if its going ahead, makes sense.
He said: “When they made the announcement about focusing the business, spreads and jams wasn’t a key area. It’s got a single factory, so it’s easy to sell, and there is no overlap with existing areas. I think it’s likely to happen. They clearly have too much debt so they need to be making disposals and these are obvious candidates.”
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By GlobalDataPremier has had a difficult 2011 with profit warnings, attempts to refinance its debts and concerns over its pension liabilities.
