Leading European biscuits and snacks manufacturer United Biscuits told just-food today (20 June) that, having completed its strategic review, the company has contacted potential buyers – testing the waters to determine the level of interest in a potential sale of some or all of the company’s assets.
UB hinted that it was considering a sale in February, when the company appointed Goldman Sachs to complete a strategic review of its business. At the same time, the company launched an aggressive price war in the UK biscuit market, prompting speculation that it was attempting to boost results ahead of a sale move.
Sophia Raymond, UB spokesperson, told just-food that it was as yet unclear what, if any, UB assets are up for grabs. “United Biscuits undertook a strategic review, in which a sale was one option under consideration. A final decision has not yet been reached,” she said.
However, Raymond conceded, “an information memorandum was sent out to potential buyers – approximately 20 companies have been approached.”
Although UB maintains the companies it contacted are confidential, likely candidates include Premier Foods, who voiced its interest in the future acquisition of UB assets in May. Meanwhile Kraft, who already owns a 25% stake in the company, has also been linked to a bid for the UK’s largest biscuit manufacturer. Other names in the hat include RHM along with various private equity groups.
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By GlobalDataUB declined to disclose the amount it hopes to raise through the sale, but it has been suggested that the group could fetch around GBP2.3bn, given that it has GBP1.8bn net debt.
“The type of sale depends on the feedback received,” Reynolds said. “It could be a straight auction or a recommended offer.” It is understood that a floatation has not been ruled out.
A timetable for a decision on whether to sell up or not is yet to be set, Reynolds continued. “The IM has just gone out. Interest will probably be expressed in the next four to six weeks. A decision will follow. It’s still very early days,” she concluded.
UB is currently owned by private equity groups Cinven, who has a 30% stake, PAI Partners, with a 30% stake, MidOcean Partners, who owns 15% and US food company Kraft, who currently owns 25% of UB.