The owner of Harry Ramsden’s is expected to table an offer for Northern Foods in a bid to derail the group’s planned merger with Irish chilled foods firm Greencore, it has been reported.
Ranjit Boparan, who holds a 6.6% stake in Goodfella’s Pizza and Fox’s Biscuits company Northern Foods through his firm Boparan Holdings, is said to have serious misgivings about the deal, according to the Sunday Telegraph newspaper.
He is understood to be working to submit a bid for the company ahead of the Takeover Panel’s Friday deadline.
Northern Foods announced an all-share nil-premium merger with Dublin-listed Greencore in November, to form a new group called Essenta Foods which will have annual sales of £1.7 billion.
It is not known how much Mr Boparan would offer for Northern Foods, whose current share price of 59.75p values the group at £280 million, but brokers think he would need to table a bid of at least 75p per share, valuing the firm at £380 million.
It is understood the bid would be in cash, funded from Boparan Holdings’ main food business Two Sisters Food Group and from bank facilities.
Mr Boparan is understood to be concerned about the lack of food industry experience on the proposed board of Essenta Foods while he is also thought to have doubts that the £40 million of synergies that Northern claims can be made from the deal will materialise in full.
It was not possible to contact Mr Boparan but the Sunday Telegraph quoted him as saying he would “continue to evaluate the information that has been provided by Northern Foods to assess whether to make a proposal”.
Northern is co-operating with Mr Boparan and has opened its books to him. Shareholders are due to vote on the merger with Greencore at a meeting on January 31.
Northern, one of the biggest suppliers of own-label products in the UK, makes pies, sandwiches, salads, puddings and ready meals from sites including the Gunstones Bakery near Sheffield and its Fox’s biscuits factory near Preston.