Greencore has abandoned its bid to buy Northern Foods, leaving the way clear for Ranjit Boparan to complete his own takeover of the manufacturing giant.
The Dublin-based group said today it did not intent to submit a revised offer, despite working for the past few weeks with a partner – understood to be a private equity firm – on a bid that would have seen it sell off some of Northern’s branded businesses.
It was hoped those sales would provide Greencore with significant funding to let it keep those parts of the Northern business with which it had the greatest synergies – primarily its chilled food operations. Northern's troubled Goodfella's pizza business and its Fox's biscuits operation were likely to have been cast aside in the event of such a deal.
“After substantial investigation, the board has determined that an improved offer could not be concluded on terms that would deliver sufficiently strong returns to Greencore shareholders,” the company said today.
Northern and Greencore had agreed an all-paper merger in November that would have created a chilled foods giant dubbed Essenta Foods. However, the Northern board subsequently gave its backing to a cash offer from the 2 Sisters owner, with Boparan valuing Northern at £342m.
Costs relating to the failed merger attempt will be treated by Greencore as exceptional charges in the first half of its 2011 financial year.
Boparan extends deadline for Northern Foods deal (3 March 2011)
Greencore poised to re-enter battle for Northern (18 February 2011)
Can Greencore still win a pizza the action after Boparan bid? (analysis; 29 January 2011)