Permira declined to comment on which firms had shown interest in the business, which is valued at around £1.8bn ($3bn). But experts have placed a trade buyer in the frame and confirmed that a Far Eastern suitor was also a possibility.
The news comes after Permira received several “expressions of interest” for the popular brand over the past month.
Julian Wild, food group director at law firm Rollits, told FoodManufacture.co.uk: “It’s obviously a big price. I think they are talking $3bn. But it is also a big business, so it is quite difficult to exactly see where a buyer will be found.
“It is most likely to be a major multi-national trade player, which will look to make further investment. But it will depend on who has the resources to take the business on. I suspect it could be a player from Far East. As usual, there will be talk of China.”
His views were echoed by Investec analyst, Martin Deboo, who said: “I would expect the Birds Eye owners to prefer a trade sale or secondary buyout as the line of least resistance.”
But Deboo warned that many UK investors might be wary of entering the ring because of the poor performance of other food firms, such as former private equity-backed Premier Foods.
The caution is related to the high levels of leverage of some firms coming on to the market in recent years, which was then followed by a fall in share price immediately after the initial public offering (IPO), according to Deboo.
He told FoodManufacture.co.uk:“In the foods category in particular, the experience of Premier Foods will make investors wary of any mature market branded foods business where retailer bargaining power, volatile commodity costs and financial leverage can make for a toxic combination.”
However, Deboo was also quick to point out that Birds Eye remained an “eminently IPO-able business”.
The move has come as no surprise to experts, who stressed that this was standard practice for a private equity business.
Wild added: “It’s no surprise that they are looking to sell. That is what private equity firms do. They usually look to move on within three to five years.
“The question now is, who exactly will have the financial muscle to take on such a successful multi-national frozen food business?”