Boparan given Northern bid ultimatum

THE British Takeover Panel yesterday told Boparan Holdings it has until 5pm on January 21 to announce its intention to make a bid for the British food group, Northern Foods.

Northern owns Goodfellas pizza and Fox’s biscuits and has agreed a merger with Greencore, the Irish-based convenience food group, whose major activity is making sandwiches for British retail outlets.

Greencore announced the merger deal with Northern in mid-November which will be put to both sets of shareholders at the end of January.

Patrick Coveney, chief executive of Greencore, will become boss of the proposed merged entity to be known as Essenta after completion of the merger.

Shareholders of both companies have been summoned to EGMs at the end of this month to agree the merger, which has the backing of the boards of the two convenience food groups.

The merger plans were thrown into serious doubt when Ranjit Boparan, a major Asian business figure, indicated he was prepared to make an offer for Northern which the board would be obliged to put before shareholders for approval.

Sketchy reports before Christmas indicated that Boparan might be prepared to shell out up to €300m for Northern, but so far the group has been kept in the dark about his intentions.

Boparan has sought and been given access to the group’s books.

He is being advised by NM Rothschild and emerged from the edges of the merger talks in December when he disclosed a 6.6% holding on Northern.

His share buying pushed up the value of Northern’s shares from 45p to (€52c) and they have gone to over 60p in the meantime as investors take a punt on the stock.

The current share price puts a value of £300m on the company and market wisdom suggests Boparan will have to bid well above that figure now to secure the business.

Last night Greencore welcomed the timetable to clarify Boparan’s intentions ahead of the Greencore and Northern Foods shareholder meetings on January 31.

In its statement it said “it continues to believe that the recommended all share merger of Greencore and Northern Foods to form Essenta Foods (the ‘Merger’), announced on 17 November 2010, represents a compelling opportunity for value creation for both Greencore and Northern Foods shareholders.”

Greencore added that in common with the board of Northern Foods, “the board of Greencore continues unanimously to recommend shareholders to vote in favour of the Merger at the shareholder meeting”.

If it goes ahead the merger would create a €2bn group with a very strong range of consumer goods.