Greencore, the Irish food group planning to merge with Northern Foods, this afternoon (22 December) insisted the move would create value for investors in both companies after it emerged that there was rival interest in the UK pizza-to-biscuits maker.
Eoin Tonge, Greencore’s group development director, said the deal, first announced last month, “represents a compelling opportunity for value creation for both Greencore and Northern shareholders”.
The two companies, both key own-label suppliers to UK multiples, said on 17 November that they planned to merge to create Essenta Foods, a business generating GBP1.7bn (US$2.62bn) in annual sales.
Shareholders in Greencore and Northern are set to vote on the plans next month but the news this morning that there is rival interest in the UK firm has muddied the water.
Earlier today, Boparan Holdings confirmed it was mulling whether to launch a rival bid for Northern. The UK poultry-to-fish company, owned by food tycoon shareholder Ranjit Boparan, announced it was “at a preliminary stage in evaluating a possible cash offer” for Northern.
Mr Boparan is a major shareholder in Northern and has been amassing a stake in the business since it went public with plans to merge with Greencore. The entrepreneur, which through Boparan Holdings runs poultry supplier 2 Sisters Food Group and fish-and-chip shop chain Harry Ramsden’s, now has a 6.6% stake in Northern.
However, Tonge said Greencore and Northern’s plan to form Essenta Foods would create “a business with real scale in the industry and substantial synergies”.
Shares in Northern were up 5% at 63.5p at 15:58 GMT. The stock had risen as high as 65.92p.
Shares in Greencore were down 5.3% at EUR1.26 at 15:59.