Greencore shares spike in rumours of a takeover bid
TV3 owners among the firms that may make a move for convenience food company
SHARES in Greencore surged yesterday after the company was the subject of renewed takeover speculation in The City.
The company rose more than 4pc in early trading before falling back amid reports that the private equity firm Doughty Hanson, which owns TV3, was lining up a bid for the Irish company.
Associated British Foods (ABF), which owns a host of food brands as well as Penneys department stores, is also said to be looking over Greencore with a view to making an offer for the company.
Charlie Mills, an analyst with Credit Suisse in London dismissed the possibility of ABF making a move for Greencore.
"The short answer is 'no'. Apart from buying an ethnic foods company a while ago we don't see any interest from ABF in chilled meals, especially own label. You can never say never but a deal for Greencore would be a bit of a departure from ABF's strategy so far," he said.
Interest from Doughty Hanson, however, appears to be more solid. The private equity house already has interests in the Irish market.
It bought TV3 in 2006 while it sold metal packaging firm Impress to Ardagh Glass for €1.7bn last year. It also has experience in the food industry, thanks to a spell owning RHM, the maker of Hovis and Mr Kipling cakes.
Greencore has been the subject of near constant rumours since the convenience foods firm failed in its bid for Northern Foods earlier this year.
The company is bidding for the UK sandwich maker Uniq -- it is a first round bidder for the troubled company but faces opposition from the British firm Samworth Brothers.
The deal with Northern was hailed as perfect when it was announced last year but that merger fell apart when the Irish company was gazumped by a late bid from the businessman Ranjit Boparan, who took Northern private.
Greencore could not be reached for comment yesterday but chief executive Patrick Coveney has said in the past he is not trying to sell, and last week denied that his firm had to find a strategic partner for the future.
"We'll look at things that are a good business and financial fit for the company, however I don't accept that because we didn't close on Northern that we absolutely have to do a deal," he said.
He also admitted that future deals would not be on the scale of the Northern Foods merger.
"I think it's more likely development will be a little more piecemeal than would have been the case with that," he said.
The stock closed the day down 1.44pc at €1.03, one cent above its 52-week low. The stock has dropped more than 18pc this year.
Greencore chief executive Patrick Coveney has said in the past he is not trying to sell, and last week denied that his firm had to find a strategic partner for the future