Greencore’s planned merger in turmoil

GREENCORE’S planned merger with Northern Foods was in turmoil yesterday following reports of a £300m (€355m) bid for the makers of Goodfellas pizzas.

Northern has confirmed it has had an approach by Boparan, an investment vehicle for British chilled-food manufacturer Ranjit Singh Borparan who already holds a 6.6% stake in the group.

British newspaper reports yesterday suggested the Indian tycoon is looking at a £300m bid for Northern Foods.

In a statement to the Irish Stock Exchange Greencore acknowledged the announcement.

It said the board believes the merger announced on 17 November “represents a compelling opportunity for value creation for both Greencore and Northern Foods shareholders, through the creation of a business with real scale in the industry and substantial synergies.”

A cash bid “would present a material challenge to the creation of Essenta (the merger between Northern and Greencore)”, said Bloxham Stockbrokers.

Boparan, who is being advised by NM Rothschild & Sons Ltd, has approached Northern Foods but the formal bid has yet to be put on the table.

Northern Foods Plc has agreed an all stock merger with Greencore.

Patrick Coveney, chief executive, Greencore is set to head up the new enlarged group which would have a turnover of €2bn.

If it goes ahead the merger would bring such brands as Fox’s biscuits, Goodfellas and Greencore’s sandwich output under one roof.

The companies said that the merger would deliver cost savings of about £40m within three years through better buying power and cost cuts. While Greencore is based in Ireland, most of its employees are in Britain, where it has 7,000 staff and 17 plants.

Northern has 14 factories and employs 9,000 in Britain.

The companies said at the time of the announcement of the deal they hoped it would safeguard jobs.