Greencore’s plan to table a revised bid for Northern Foods was scuppered after the Irish company failed to secure the backing of the trustees of its UK takeover target’s pension fund.

Earlier today (9 March), Greencore announced that it had pulled out of the race for Northern after working with an unnamed partner, reported to be a private-equity fund, on an improved offer for the company.

Greencore’s plan involved the sale of some of Northern’s branded businesses to the unnamed partner. The Irish convenience food group would then have taken on the parts of Northern, which also supplies own-label food to UK multiples, that it believed had “the greatest synergy potential”.

Nevertheless, Greencore admitted this morning that the offer “could not be concluded on terms which would deliver sufficiently strong returns to Greencore shareholders”.

just-food understands that Greencore, which saw its plan to merge with Northern derailed after the UK firm’s board recommended a rival bid, and its unnamed partner had agreed on the structure of the revised offer, which also had the support of the Irish firm’s shareholders.

However, the trustees of Northern’s GBP142m (US$230.2m) pension deficit are understood to have rejected Greencore’s plans.

City sources said a sale of some of Northern’s branded businesses could have reduced the profits from the remaining business acquired by Greencore by 30-40%. The liability for Northern’s pension deficit would have remained with Greencore.

Greencore declined to comment on the discussions it had with various stakeholders over its revised plan.

The rival bid for Northern, made by UK poultry-to-fish group Boparan Holdings, was tabled in January and valued the Fox‘s biscuits and Goodfella’s pizza maker at GBP342m. Boparan Holdings has received the backing of over a third of Northern investors and needs the approval of 75% of shareholders. The company, run by food tycoon Ranjit Boparan, has set a deadline of 16 March for those holding Northern shares to accept his offer.