This defeat could be a blessing in long term
Published 10/03/2011 | 05:00
THE DECISION by Greencore to walk away from Northern Foods appears to have brought to an end a saga that has been drawn out over five months.
Ultimately, the Irish company could not match British chicken magnate Ranjit Boparan's gargantuan 73p-a-share all-cash bid for Northern, even with a joint bid, believed to be with a private equity partner.
While this is undoubtedly a blow to Greencore and its chief executive Patrick Coveney, it may turn out to be a positive for the company in the long run.
Mr Boparan's bid valued Northern at some £342m (€398m). Analysts had warned against a "dutch auction", which is exactly what Greencore would have been setting itself up for, had it made a new bid.
For a new bid to be viable, some of Northern's brands would have had to be sold off -- but the pension liability would have remained the same.
By walking away now, Mr Coveney will able to concentrate on his own business, which has been hit by higher input costs as food prices soar.
Ultimately, the loss of Northern may turn out to be a blessing in disguise for Greencore. Mr Coveney's task now is to pick himself up, dust himself off, and take the company forward.