Sources close to the company said trade buyers were only likely to be interested in parts of the Dublin-based business, which holds the UK licence for Entenmann’s cakes and desserts and makes own label desserts and ready meals for the multiples from five UK plants.
One said: “Looking at the figures, this hasn’t come as any real surprise, they were so highly geared. Potential buyers might want the business - especially the Sara Lee and Entenmann’s licences - but not the plants. Why pay for the assets?”
Northern Foods, Uniq or Greencore might be interested in bits and pieces, he added, “but not the whole lot. However, the ready meals business in Hartlepool is quite attractive and a management buyout is always a possibility.”
Hibernia recently reported operating losses of E11.4m on flat sales of E200m in the year to March 31.
However, underlying sales at Brains and Entenmann’s continued to improve and Sara Lee gateaux were back in growth for the first time in three years after a move away from margin-eroding bogofs.
The closure of Hibernia’s Bristol plant and the transfer of production of Entenmann’s and Mr Brains products to its other sites was also expected to save E5-8m a year, said one industry source. “It’s a tragedy. They just got into too much debt buying things, and it only takes someone to call it in and the wolves are at the door.
“The irony is that the new Sara Lee Gold range has been going like a bomb. The management just hasn’t had time to take the brand back upmarket, where it belongs.”
British Frozen Food Federation boss Alf Carr said Hibernia’s problems were a salutary tale of the damage excessive discounting could do to a major brand.There are too many excellent products that are being discounted far too heavily. It devalues the whole category.”
Former chief executive Oliver Murphy and finance director Colm Delves, who were recently replaced by non-executive directors Harris Cohen and Stuart Anderson, are now suing Hibernia for unfair dismissal.