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January 21, 2011

UPDATE 2: UK: Boparan tables GBP342m bid for Northern Foods

UK poultry and fish group Boparan Holdings has decided to table a takeover bid for Northern Foods, the maker of Goodfella's pizza and Fox's biscuits planning to merge with Ireland's Greencore.

UK poultry and fish group Boparan Holdings has decided to table a takeover bid for Northern Foods, the maker of Goodfella’s pizza and Fox’s biscuits planning to merge with Ireland’s Greencore.

This evening (21 January), Boparan made a GBP342m (US$547.2m) offer for Northern after weeks of speculation and ahead of a Takeover Panel deadline that expired at 7pm tonight.

The bid, worth 73p a share, has been backed by Northern’s board, which had spent over two months supporting the company’s plans to merge with Greencore since the proposals were announced in November.

Northern’s directors have withdrawn their support for the plans to merge with Greencore. Investors in Northern and in Greencore are due to vote on the plans to create the combined company – to be called Essenta Foods – on 31 January.

Northern chairman Anthony Hobson said: “This attractive cash offer provides shareholders with an immediate premium to the value of Northern Foods within Essenta Foods. Today’s bid from Boparan is a compelling opportunity for our shareholders to realise a cash exit, and as such the board of Northern Foods will be unanimously recommending that Northern Foods shareholders accept Boparan’s offer.”

Boparan Holdings, owned by food tycoon and Northern shareholder Ranjit Boparan, owns private-label chicken processor 2 Sisters Food Group, fish supplier Fishworks and fish-and-chip shop chain Harry Ramsden’s.

The company said its offer represented a premium of around 84.1% to the value of Northern’s shares implied by the detail of the plans to merge with Greencore.

Mr Boparan, who has built a 6.6% stake in Northern since the UK firm announced its plans to combine with Greencore in November, was said to have doubted the potential value of the merger, in particular the annual GBP40m of synergies the companies had touted.

Commenting on his offer, Mr Boparan said: “The combined group will be one of Britain’s major food suppliers with a turnover of more than GBP2bn. This will create significant opportunities which will benefit customers, consumers and employees. We look forward to working with the experienced Northern Foods team and combining our skills in product innovation and customer partnerships to create a larger business with enhanced prospects.”

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