Greencore is considering its options after Northern Foods backed an eleventh-hour takeover bid by Ranjit Boparan.
The company is weighing up whether to add cash to its all-share offer, after Northern’s board accepted a £342m offer from the poultry magnate on Friday evening.
Boparan’s offer is worth 73p a share. Last week some of Northern’s largest investors, who include Scottish Widows and Legal & General, indicated they would require at least 75p a share to abandon the Greencore tie-up.
The proposed merger to create Essenta Foods could generate annual savings of up to £40m.
“The board continues to believe that a combination with Northern Foods to create Essenta Foods represents a compelling opportunity,” Greencore said in a statement.
“However, the board recognises the importance attached by the Northern Foods board to the certainty of cash value in their decision to change their recommendation. Given this latest development, Greencore will now consider its options and as part of this process intends to seek the views of both Greencore and Northern Foods shareholders.”
Following Boparan’s bid on Friday evening, Northern’s board recommended shareholders vote against merging with Greencore at the company’s EGM on 31 January.
Boparan’s pension deal paves way for Northern bid (21 January 2011)
Northern shareholders warn against cheap sale to Boparan (19 January 2011)
Boparan told to put up or shut up over Northern bid (5 January 2011)