Premier Foods tight-lipped on spreads business sale

07-May-2012 - Last updated on 08-May-2012 at 10:42 GMT

Private equity firms are reportedly vying to acquire Premier's spreads business

Premier Foods is remaining tight-lipped about press reports that private equity firms are competing to buy the firm’s spreads business, which includes Sun-Pat and Hartley’s Jam.

Asked to confirm reports of an immanent sale, a spokesman told FoodManufacture.co.uk: “There is no comment from the company on that.”

Private equity firms believed to be bidding for Premier’s spreads business include: Morgan Stanley Private Equity (a division of the giant investment bank) TDR Capital and Capvest, according to a report in The Telegraph.

CCMP Capital was previously thought to be a potential buyer for the business, which Premier wants to offload in order to focus on its Power Brands.

Price tag

Estimates of the price tag attached to Premier’s spreads business range from between £160M to £180M.

TDR Capital is a former owner of Pizza Express, while Capvest used to own leading frozen fish brands Youngs and Findus.

Premier’s Sarsons Vinegar is also reported to be for sale with a price tag of about about £30M.

Meanwhile, Premier’s ceo Michael Clarke used the firm’s interim management statement for the three months ending March 31 to confirm his strategy of selling certain businesses to focus on eight power brands.

Clarke said: “…. the group will continue to divest selected businesses to sharpen focus on its power brands.”

Latest sales of the key power brands – Batchelors, Bisto, Ambrosia, Hovis, Loyd Grossman, Mr Kipling, Oxo and Sharwood’s – rose by 3.7% for the three months ending March 31. But other sales were broadly flat.

Power brands

Darren Shirley and Clive Black, analysts with Shore capital, said last month that the firm’s disposals would be key to its success. “We believe the successful delivery of such disposal proceeds and the dilutive impact on sustainable cash flows, is important to Premier’s future and stock performance as a recovery on the operating performance and the growth of power brands.”

In March, Manchester jam manufacturer Duerr’s confirmed it was still considering a bid for Hartley’s jam.

The firm first expressed an interest in the business in January when Duerr’s md, Mark Duerr said: “As the biggest independent jam producer in the UK we are investigating opportunities related to the sale of Hartley's.

“If the business can align with our proud heritage, quality and history of innovation then, naturally, we would be interested, but it would be inappropriate to speculate on this without fully evaluating the business.”

No one from Duerr’s was available for comment.