Norway buys big chunk of Greencore
Published 21/11/2010 | 05:00
THE oil-rich state of Norway has taken a stake in the soon-to-be merged Greencore and Northern Foods food giant. The country's €360bn sovereign wealth fund, pumped up by billions in North Sea oil revenues, has revealed that it owns 4.1 million shares in the company or a near 2 per cent stake. The state fund has also revealed a similar-sized stake in Northern Foods.
Norway's sovereign wealth fund, run by Norges Bank, has turned up its nose at Irish government debt but Irish business is clearly on its radar. the fund is one of the largest shareholders in Gary McGann's Smurfit Kappa, with a 6.35 per cent stake worth nearly €110m.
Last week, Patrick Coveney's Greencore -- the largest sandwich maker in the UK -- announced plans to merge with Leeds-based Northern Foods, which makes Goodfella's Pizza and Fox's biscuits. The newly wed entity, called Essenta, will have joint sales of more than €2bn. One of the key drivers of this deal was the prospect of saving almost €47m a year through new efficiencies created by the merger.
Shares in both companies rose sharply when news of the proposed deal broke. It also prompted strong market speculation that Greencore could face a rival bidder seeking to bag Northern Foods. Private equity groups rather than trade players were tipped as potential buyers. However, by Friday evening, shares had settled back a little as no other bidders had emerged.