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Greencore refuses to rule out bid

Supermarket sandwich maker Greencore told shareholders today it was still mulling over whether to launch a counter offer for former merger partner Northern Foods.

Greencore had agreed a tie-up with Goodfella's pizza and Fox's biscuits-maker Northern but the deal was scuppered when an offer by the owner of Harry Ramsden's fish restaurants Ranjit Singh Boparan was accepted by Northern's board.

Dublin-based Greencore, which supplies ready meals and convenience food to many of the UK's supermarkets, told its annual general meeting that it is still considering its options and will make a further announcement in due course, even though ten days have now passed since Mr Boparan made his offer.

The operator of 17 factories in the UK also reported that sales increased 7.6pc to €208.7m in the three months to Christmas Eve despite disruption caused by heavy snowfall.

The company said it had benefited from the trend of people eating out less after it reported a 22pc rise in sales of chilled ready meals.

A Northern shareholder vote on the proposed merger, which was due to take place today, was postponed following a request from Greencore.

In November, Greencore and Leeds-based Northern unveiled plans to merge to create Essenta Foods, which with a combined turnover of €2bn would have the scale to negotiate good terms with the supermarkets.

They said the merger would create cost savings of €46m a year.

But Mr Boparan, who controls Bromwich-based chicken supplier Two Sisters, made a €397m bid for Northern on Friday 21 January after a two hour extension to the Takeover Panel's "put up or shut up" deadline.

He announced plans to join Northern with Two Sisters, which supplies chicken products including the Buxted Original and The Devonshire Red brands to supermarkets, to create a supplier with combined sales of €2.3bn annually.

Northern's board described Mr Boparan's offer as "compelling" and retracted their previous recommendation that shareholders vote for the merger.

Greencore today said it still believed that Essenta Foods would create value for both sets of shareholders.

Greencore's main divisions of food-to-go and prepared meals performed well, the company added, and it expects continuing strong growth in 2011.

Chilled ready meals had shown particularly strong growth with the help of additional orders from a new customer.

The manufacturer also said price inflation for food and packaging had grown at an increasing rate in the final three months of 2010. It is passing on the price hikes to customers and cutting costs from its business.

Shares in Greencore were up nearly 1% today.

PA Media