Dairy Crest has received a €430m (£344m) bid from Montagu Private Equity for its French spreads business St Hubert.

If the bid is approved, it means Dairy Crest will make a tidy profit of about £96m following its purchase of St Hubert in 2007. The sales proceeds will be used to reduce the company’s net debt, the company said.

Dairy Crest was delighted to have agreed the proposal, in principal, of St Hubert, which reflected the progress the business had made under Dairy Crest’s ownership, said chief executive Mark Allen. “Over the coming months, with a strengthened balance sheet, we will be able to consider wide range of opportunities including synergistic acquisitions in the UK.”

The proposed transaction is subject to French Works Council consultation as well as approval by Dairy Crest’s shareholders, the French competition authorities and must receive financing consents.

Dairy Crest expects the transaction to complete on 30 September if all consents are granted and has entered into an exclusivity agreement with Montagu pending those consents.

St Hubert – which has a 39% market share of the overall French spreads market by value – generated EBITDA of €48.1m (£41.5m) in the year ended 31 March 2012.