Premier Foods is struggling to attract the £250m price tag it has earmarked for the sale of its meat-free brand Quorn, The Grocer understands.

Premier confirmed in October discussions with bidders had begun in an effort to draw down its £1.6bn debt but stressed there was "no guarantee" that a deal would go ahead. Quorn, which Premier acquired in 2005 for £172m, is now valued at up to £250m.

According to M&A sources close to the deal, talks are ongoing with both private equity and trade players, but the company is yet to secure a buyer.

"There's not a great certainty they'll get a premium price on the business and ultimately if they don't get the right price they may not do the deal," he said. "There'll be plenty of interest but it may not be at the price levels they were hoping for."

"If they want to sell it, they will sell it," argued another source. "It's an attractive business in terms of the market it operates in and with potential growth. Whether they'll get the price they're trying to achieve is a completely different matter. Private equity is understood to be involved and it goes back to the funding environment and how much equity would need to be put in."

Premier confirmed last week it had also received approaches for its East Anglian canning arm.

Read more
Own-label slump hits Premier Foods sales (28 October 2010)
Premier may have to sell Hovis, say experts (25 October 2010)
Is Quorn still cool enough to help rescue Premier Foods? (analysis; 9 October 2010)

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