Premier Foods wasted little time this week in confirming Bank Holiday press reports that it was eyeing potential acquisitions.
In a statement to the Stock Exchange on Tuesday, the company admitted that it was "at a preliminary stage in evaluating a number of opportunities that could potentially meet its acquisition criteria for value creation".
It stopped short of confirming that its key targets were United Biscuits and Campbell Soup Co's UK operation, as had been widely reported. However, sources close to the company have confirmed that Premier Foods has been looking closely at these businesses.
Premier has developed a reputation for bringing the best out of old favourites. As one analyst puts it: "What Premier Foods does is buy businesses with iconic brands that they believe they can create more value from, through better positioning, marketing and creating efficiencies."
If Premier Foods really is looking for more iconic brands, assets from both UB and Campbell would appear to fit the bill.
UB, valued by analysts at £720m, has, among others, Hula Hoops, McVitie's, Jacob's, KP Nuts, Penguin and Jaffa Cakes in its brand stable. Meanwhile, Campbell, valued at £450m, boasts Oxo, Batchelors, Homepride and Fray Bentos and holds a licence to produce Campbell's soups.
It's not too much of a struggle to picture some of these products sitting alongside existing brands in the Premier Foods stable such as Sun-Pat, Branston, Crosse & Blackwell and Ambrosia. But which ones?
Premier declined to comment. The only brand named in press reports was UB's Go ahead!, which unlike many of the other brands in the frame is showing value growth, according to our 2005 Top Products Survey.
Sales of many of the others, however, have fallen, presenting any buyer with an opportunity for significant uplift. David Hallam, analyst at Williams de Broë, believes that Premier Foods will be highly selective about which, if any, of these brands it buys. "It will be a surgical strike," he says. He adds that the company would only be interested in what could become "drive brands" - products that would bring growth.
Hallam stops short of speculating which brands might be of particular interest, but another analyst thinks Campbell's Oxo would be high on Premier Foods' wish-list.
"Oxo would be a nice brand for them. There's only one real competitor in the market in the form of Unilever's Knorr."
Batchelors, too, could be of interest. Premier already has dehydrated products, including Smash, and extending this portfolio might appeal.
Batchelors' canned peas would also fit nicely with Premier Foods' substantial canned vegetable business, which is predominantly own label, the analyst says. Another says UB's KP Nuts would be a good one to snap up.
Analysts at Citigroup agree that Campbell has obvious appeal for Premier Foods, and although uncertain about UB, they state: "We believe that Premier's interest in UB must lie in its belief that it can make substantial inroads into the overheads base."
It should be noted that, until 2000, Premier Foods chief executive Robert Schofield was MD of UB's UK business. It doesn't stretch the bounds of credibility to suggest this link might be the backdrop to any bid approach.
Intriguingly, Premier Foods said in its statement that it was looking at "a number of opportunities" - suggesting it had others besides UB and Campbell in its sights. So, who else might be on its shopping list? No-one is in a rush to speculate. One analyst says: "There are a number of big players out there with big brands they want to get rid of."
How Premier Foods would fund any acquisitions remains unclear. There has been talk of it teaming up with private equity companies and another food company to buy, and subsequently break up, UB. But one analyst, at least, says he'd be surprised if another trade buyer was involved in a deal.
Citigroup says it believes that whatever Premier Foods does will be the right thing. "We have faith that Premier will make the right decisions, whatever they may be."