Both firms have been linked with a potential £100m takeover of Uniq, which has been put up for sale by its pension fund, which now owns a 90.2% stake; this follows the firm’s novel pension deficit-for-equity deal to remove a £400m+ fund deficit.
Uniq’s ‘jewel in the crown’ is its sandwich business (part of Food to Go) which sold 90m of the 1.6bn packaged sandwiches bought in the UK last year and supplies Marks & Spencer; the company also produces prepared salads.
‘Millstone for decades’
But Dr Clive Black, an analyst at Shore Capital, told FoodManufacture.co.uk that the Minsterley business “has been a millstone for decades now” and could ultimately scupper any bid for Uniq as a whole.
Uniq’s desserts division – which includes Minsterley and Evercreech – lost £2.7m in 2010, according to company figures.
“It’s a real problem in terms of engineering a deal because everyone will want the bright spots and nobody will want Minsterley,” said Black.
“I’m not so sure it’s as easy a deal to engineer as it may seem on paper. Bear in mind that Uniq has been for sale for years.”
Right time for sale?
Julian Wild, corporate finance partner for Rollits, agreed that Minsterley presented a massive problem for any potential bidder. “Now is not a good time to be trying to sell the Uniq business, and I struggle to see what the logic is,” he said.
“I don’t think the business is performing brilliantly and now is a very difficult time to be selling a business and trying to optimise value.”
Black said a number of companies could be interested in Uniq, but Wild doubted there would be a serious bid. “Uniq is pretty much entirely a private-label chilled business: that is a tough place to be,” he said.
“You’re dealing with major retailers who regard those private labels as being theirs and therefore that business can switch around at any time.
“There are a limited number of UK players who are interested in that sort of business, and there’s no way any player outside the UK is going to be interested.
“If there had been serious interest in Uniq it would have emerged long before the pension trustees bought 90% – and there was no interest.”
Samworth Brothers vs. Greencore?
Wild said that Ginsters pasty producer Samworth Brothers did not have a history of major acquisitions and would only be interested in Uniq’s sandwich operations.
Meanwhile, he said that Greencore, which recently failed in its bid to buy Northern Foods, was “under a lot of pressure to do a deal”, but added: “Is this the right deal for them to do? I very much doubt it.”
Black described Greencore’s performance in prepared foods last year as “outstanding” and also described Samworth as “an absolutely outstanding organisation”.
Any Uniq bidder would want “fairly obvious benefits for the prepared food side”, he said,including synergies via shared central overheads.
Uniq’s operating profits before significant items stood at £4.1m in 2010, against a £1.9m loss in 2009. Revenues were up 6.8%.