Greencore shares down as takeover talks break down

GREENCORE has announced that talks relating to a takeover of the company have broken down.

The Dublin-headquartered convenience food giant’s share price jumped by over 20% on October 25 on news that the company had received a possible takeover approach. Noting the events of that time, management said that such discussions were entered into “with a view to establishing whether a proposal acceptable to the board, which could then be put to shareholders, would be forthcoming”.

“Given the board’s unanimous view on the strong underlying value of Greencore and the current dislocation in global equity and debt capital markets, both parties have agreed to end discussions. Accordingly, the board can confirm that the company is no longer engaged in any discussions regarding a potential offer for the company,” it added.

Greencore’s management noted “the board emphasised that the discussions were at a preliminary stage and there was no certainty that any offer would be made”.

This came ahead of today’s publication of Greencore’s full-year financial results for the 12 months to the end of September.

Greencore has been surrounded by consolidation news this year — through its attempt to buy Northern Foods; then through its takeover of another British foods business, Uniq.

The failed takeover bid notice for Greencore did not spook analysts too much. Goodbody said it was reinstating its “buy” recommendation on the stock.

Bloxham Stockbrokers said yesterday’s news switched the focus to today’s results and current trading levels, adding that Greencore “must show an ability to wring out a material EBITDA [earnings before interest, tax, depreciation and amortisation] increase in its current full year, if bid-connected valuations are to be sustained.”

However, Greencore’s share price was down by just over 10% — or 7 cents — yesterday, closing at 64c