Greencore abandons Northern Foods bid

Supermarket sandwich maker Greencore this morning announced that it does not intend to make a revised offer for Leeds-based Northern Foods, which makes Fox's biscuits and Goodfella's pizza.

Supermarket sandwich maker Greencore this morning announced that it does not intend to make a revised offer for Leeds-based Northern Foods, which makes Fox's biscuits and Goodfella's pizza.

The tie-up, announced in November, was to have created a new firm called Essenta with combined turnover of 2bn and was originally to have been completed by the end of June.

However it ran into difficulties when an offer by the owner of Harry Ramsden’s fish restaurants Ranjit Singh Boparan was accepted by Northern’s board in January.

Dublin-based Greencore, which supplies ready meals and convenience food to many supermarkets in the Republic of Ireland and the UK, had said that it was still considering its options but today's announcement sounds the death knell for the deal

"For some time the board of Greencore has believed both in the considerable strategic merits of consolidation in the UK convenience food sector and in the strong logic of a combination between Greencore and Northern Foods," the company said in a statement.

"Over the past few weeks Greencore has been working with a partner in order to agree a simultaneous sale of certain of the Northern Foods branded businesses," the statement continued.

"This approach was intended to provide significant funding and allow Greencore to acquire only the parts of the Northern Foods business with the greatest synergy potential.

"This relatively complex structure required a range of stakeholders to reach agreement. However, after substantial investigation, the board has determined that an improved offer could not be concluded on terms which would deliver sufficiently strong returns to Greencore shareholders."

The company said costs incurred in the abandoned merger bid will be treated as exceptional charges in the first half of the 2011 financial year.

Greencore has around 7,000 staff and 17 manufacturing facilities in Ireland, the UK and the US.

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