Greencore to buy Uniq for €125m

GREENCORE is to acquire British convenience food group Uniq for about £113 million (€125m).

The deal — which has already been accepted by 90% of Uniq’s shareholder base — marks the largest undertaken by Greencore since its £250m takeover of Hazlewood Foods 10 years ago. It also comes four months after the Irish food group admitted defeat in its bid to boost its British business through the takeover of Northern Foods.

The acquisition still requires full shareholder and regulatory approval, but it’s hoped that completion will be reached by the end of September. An extraordinary general meeting for Greencore shareholders will be held early next month; but nearly 38% of the group’s shareholder base has agreed in principle to the deal. Greencore is looking to raise more than €80m from a rights issue in order to partially fund the takeover. Barclays Capital is sole book-runner for the rights issue.

Uniq’s shareholders are being offered 96p per share, a premium of more than 25% on the company’s closing share price on Monday.

Uniq will be subsumed into Greencore’s British operations; while on a group-level Greencore will switch its reporting currency to sterling and, in time, de-list from the ISEQ in Dublin and seek a listing in London. It will, however, keep its name and its Dublin headquarters.

Greencore chief executive Patrick Coveney said the deal fits with the group’s strategy of strengthening its position in Britain, expanding its category portfolio and broadening its customer base. For instance, Uniq’s status as a major provider to M&S & will see Greencore move from being the provider of 1% of M&S’s food product to 51%.

“It represents an important milestone, as we extend the scale and leadership positions of our group in the UK convenience market,” Mr Coveney added.

He also said that Uniq will strengthen Greencore — adding about £300m to its annual revenues. Uniq’s management, meanwhile, called the deal “a good offer from a strong business that provides an excellent strategic fit,” adding that it represents “the best possible result for all concerned” — employees, pension members and shareholders alike.

Greencore also issued a third quarter trading update, yesterday, which detailed an 11% year-on-year increase in group revenue for the period.

Despite yesterday’s news, Greencore’s share price was down by nearly 9% at 88c in Dublin.