Sources suggest staff at Weetabix's headquarters in Burton Latimer, Northamptonshire, were as surprised as anyone by recent press reports about a takeover.
They confirmed a Chinese contingent visited the complex a year ago and a video presentation about the business was made in Chinese, suggesting that an exploratory meeting took place. However, there have been no signs of further negotiations, they said.
'Timing is wrong'
Some suggest that a sale now would be oddly timed, as Giles Turrell only replaced chief executive Ken Wood in October last year. In addition, he implemented further board appointments. "A lot of these chaps have only been in place for 12 months," said one source. "They would be looking for a three to five year package The timing is wrong."
He said recent efficiency improvements at Burton Latimer also meant the company would command a higher price. "The Chinese are known for being sharp. They wouldn't want to pay top dollar, so I wouldn't be surprised if it [any deal] didn't come off at this time." Reports suggest Weetabix could fetch about £1bn.
Press coverage in 2004 said Bright Group, which has invested in agriculture and food processing, was interested in buying Weetabix. However, a deal never materialised and it denied interest in the breakfast cereals manufacturer last month. Lion Capital has also refused to comment.
Investec analyst Nicola Mallard said as a trade buyer, Bright Group would focus on Weetabix's long term development, rather than on short term returns that most private equity firms would expect. "They could see the value of the brand."
Commenting on China's interest in the UK food industry, Alicia Forry from city analyst Collins Stewart said: "We could see a lot more Chinese food businesses interested in the UK. They will want to diversify outside China to maintain food supply security."