Greencore, the Irish-based convenience food group best known for its strong presence in the British sandwich market, still has to declare if its talks with an unnamed private equity group over the past few weeks, will lead to a counter offer.
The appointment recently of ex-Cadbury executive Alan Williams as its finance director is fuelling speculation it might have gone cold on the deal. Under Greencore’s original merger plan with Northern Foods the latter’s finance director Simon Herrick had been agreed for that role.
Darren Shirley, an analyst with Shore Capital in the UK told FoodManufacture.co.uk recently that “without knowing the details of any possible counter offer, it’s hard to know how any potential deal could work.”
Shirley said: “we wouldn’t rule out a counter bid, involving either a private equity firm or another large industry player.
“There’s certainly merit in the tie-up in own label between Greencore and Northern, and in any spin-off of the latter’s branded business,” he said.
Other UK analysts have said Greencore would do better to focus its attention on buying own-brand products from other sources rather than getting tied up in what could be a complex deal.
City analysts told the magazine the Irish group might be better off setting its sights slightly lower and go for an acquisition such as the own label Brookes/Avana which is part of Premier Foods.
But Shirley said it would be wrong to presume anything at this stage and, despite the clock ticking down, Greencore could still come back with a fresh pitch for Northern which, apart from its Fox’s Biscuits and Goodfellas pizza, has a range of own-brand goods in its portfolio.
Sources close to Greencore have also warned against writing off an alternative offer emerging.
Greencore has a pretty deep knowledge of Northern’s operations and is excited about the possibilities offered by a merger.
It is also confident of getting substantial savings from the enlarged group of up to €50m by 2014.