Greencore seals €125m deal for UK sandwich firm Uniq
Published 13/07/2011 | 05:00
GREENCORE may have finally got the acquisition it has been searching for after the company agreed to buy a UK sandwich maker in a multi-million euro deal.
The Irish company has agreed terms to buy Uniq in a deal worth 96p per share, or £113m (€125m). Greencore fell by more than 12pc in Dublin before recovering to close down 8.85pc at 88c. Uniq ended the day up 23.2pc at 94.25p.
Greencore chief executive Patrick Coveney said the deal, which he claimed would provide synergies of some €10m, "was perfectly aligned to our strategy".
"It will provide further scale in two key categories -- food-to-go and chilled desserts -- and is underpinned by substantial synergies. It represents an important milestone as we extend the scale and leadership positions of our group in the UK convenience market," he said.
Nearly 40pc of shareholders were backing the bid already, he added.
The offer comes some three months after Greencore lost out on a bid for the British company Northern Foods. Unlike that debacle, however, Greencore has received an "irrevocable undertaking" from Angel Street -- the company that represents the Uniq pension funds and owns 90.2pc of the company shares. Greencore had long been mentioned as a potential suitor for Uniq, which had been up for sale since March. The company, which was born out of the much bigger Unigate company, had been crippled by a massive pension deficit, which resulted in the pension funds taking over the company in a "deficit-for-equity swap".
Mr Coveney described the food-to-go business as the "jewel in the crown" of Uniq's business. It is a major sandwich supplier to Marks & Spencer.
Mr Coveney acknowledged that questions remained about the firm's desserts operation, which has long been considered a "problem child" for the company. He said there were no plans "at the moment" to sell or close the business.
"Management are working on getting that sector profitable and we are very supportive of that," he said.
As part of the deal, Greencore will list on the London Stock Exchange, which may mean delisting from Dublin. The company will also report in sterling going forward, Mr Coveney said.
Meanwhile, Greencore has said it is on track to meet its guidance for the year if exchange rates remain steady.
In a statement after the third-quarter close, the company said the trading environment in the UK was still "volatile" and is expected to remain so for the rest of the year.