New look for Graze

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Food giants Kellogg’s, Unilever (ULVR) and PepsiCo are battling to buy healthy snacks business Graze, as bidding kicks off more than a year after a sale was first announced.

The Grocer understands first round bidding has taken place for the snack business as PE owner Carlyle, which hired Harris Williams to find a buyer in autumn 2017, looks to secure a sale by Christmas.

Graze, which was founded by Graham Bosher in 2008, was bought by the PE giant in 2013 for £50m, and has since rapidly expanded in bricks and mortar stores after establishing itself as a direct-to-consumer supplier.

Industry sources have told The Grocer that bids were filed by the potential buyers at the start of October, with Kellogg’s, PepsiCo and Unilever leading the way.

It is understood Carlyle is hoping to sell Graze for £250m to £300m - more than five times what it initially paid.

It is also understood Kellogg’s made a pre-emptive bid in the spring, ahead of the planned auction, but failed to agree on a fee.

“Kellogg’s has had a woeful time in snacking of late, so it makes a lot of sense that they are really keen to buy Graze,” said an industry source. “It is definitely looking to grow through acquisition in healthy snacking; they bought RX Bar in the US last year.”

City sources have described the initially reported £300m asking price for Graze as “insanely high”, with one dealmaker saying he would “eat his hat” if anyone met that sum.

Graze launched in retail in 2015 and its nuts, seeds and dried fruit boxes are available in more than 11,000 Tesco, Sainsbury’s, Waitrose, Asda, Boots and WH Smith stores nationwide.

Check out The Grocer’s finance section to read the full story later this morning

Morning update

Searches for UK brands from overseas have jumped in the third quarter of 2018, driven by interest from within the EU, according to new data from the British Retail Consortium and Google.

The number of mobile searches for British brands has risen 2018 for the three months to September, up from 17% growth in the third quarter last year, the BRC-Google online retail monitor has shown.

The monitor revealed that interest from non-EU nations was significantly lower than within the EU.

It also highlighted booming interest for home and garden products, with UK searches for brands in the sector jumping 13% for the period, while overseas searches for the category also jumped 38%.

“Consumers continue to look for the best deals online as we approach Black Friday,” commented chief executive of the BRC, Helen Dickinson.

“The Google-Online Retail Monitor shows the top four general retail searches are all about consumers looking for discounts.

“There was strong growth in searches for UK brands from international consumers, and this growth was significantly higher from EU countries than elsewhere.

“If British companies are to capitalise on this increased interest within the EU, it will be vital for the British Government to reach a deal to ensure frictionless trade after Brexit.”

After a thaw in US-China trade tensions, the FTSE 100 has leapt 0.9% to 7,176pts this morning.

Frankie and Benny’s owner The Restaurant Group (TRG) has continued to rebound, jumping 4.2% to 270p, after slumping earlier this week on news it is buying Wagamama for £559m.

Other early risers include Smurfit Kappa Group (SKG), up 2.9% to 2,540p, Glanbia (GLB), up 2.1% to 14.7p, and Ocado Group (OCDO), up 2% to 863.8p.

It’s been a generally positive with few fallers of note, with Dairy Crest (DCG), down 0.8% to 445.4p and Imperial Brands (IMB), down 0.7% to 2,671.5p.

Yesterday in the city

The FTSE 100 slipped as the value of the pound rose on increased optimism surrounding a Brexit deal - it closed down 0.2% to 7,114pts.

Patisserie Valerie (CAKE), the crisis-stricken chain currently suspended on the AIM index, received approval from shareholders for emergency fundraising at its EGM yesterday.

Despite tempers flaring at the meeting, shareholders approved the share placing, which involves the sale of 31.54m shares to institutional investors at 50p each, a hefty discount to the 429.5p price of Patisserie Holding’s stock before its suspension.

Food delivery service Just Eat (JE.) bounced back into life after months of steady decline, jumping 6.3% to 646p, after a 41% jump in third quarter revenues.

Other risers yesterday including The Restaurant Group (TRG), up 7.5% to 259.2p, McColl’s (MCLS), up 7.2% to 137p, Majestic Wine (WINE), up 4.6% to 409.5p and Whitbread, also up 4.6% to 4,601p.

Irish dairy group Glanbia (GLB) sank 7.4% to 14.5p, as it reported 6.7% volume growth in the third quarter alongside a 4.1% decline in pricing.

Other fallers included Dairy Crest (DCG), down 6.1% to 448.8p, Smurfit Kappa Group (SKG), down 3.8% to 2,468p and Purecircle Limited (PURE), down 3.5% to 328p.