Boparan bid scuppers Greencore’s merger plans
Northern Foods has withdrawn its support for the Greencore merger, and is instead recommending a counter-bid from Ranjit Boparan to shareholders.
Print14 February 2011
Irish food group Greencore’s proposed merger with Northern Foods has come unstuck, after the company controlled by British chilled food supremo Ranjit Boparan made an attractive cash offer for Northern Foods.
Boparan’s offer values the company at £342 million (€402 million), whereas under the Greencore proposal, the Irish company would have paid £15 million each year into the deal.
Northern Foods has subsequently reversed its previously stated policy by withdrawing its support for the Greencore merger. The group has accepted the counter-bid, and is recommending its shareholders vote in favour of the new 73p a share cash offer.
Following the announcement, Greencore said it was considering its options. The Irish group is entitled to receive a break fee of £1.83 million (€2.18 million) as a result of Northern Foods withdrawing its recommendation for the proposed merger and announcing an alternative transaction.
Greencore and Northern Foods had also agreed to share equally the fees, costs and expenses incurred in gaining advice for the “joint benefit” of both companies regarding the proposed merger.
Northern Foods said it would recommend the new bid to shareholders as “a compelling opportunity for [them] to realise a cash exit”.
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