GREENCORE has made a £113m offer for rival food company Uniq as it paves the way for a delisting in Ireland ahead of joining the London market.
The Dublin-based company, which is one of Britain’s biggest providers of ready meals, said its 96p per share offer has received the backing of Uniq’s board, which put the firm up for sale in April.
The company changed its name from Unigate when it sold its dairy empire to Dairy Crest 11 years ago. Its pension fund bought the business in February this year to wipe out a gaping pension fund deficit.
Patrick Coveney, Greencore’s chief executive, said Uniq’s food-to-go business, for which Marks & Spencer is a major client, would be an excellent fit with Greencore’s strategy in the UK.
The firm also said it expects to make cost savings of at least £10m by eliminating back office costs.
Coveney said Uniq’s struggling desserts arm, however, would have to be restructured.
Greencore plans to fund the acquisition through a £70m rights issue, with the remaining £53m coming from an increased debt facility.
Coveney added that Greencore would use the takeover to “tidy up our capital markets position for our shareholders” including seeking FTSE index inclusion. Shares in Greencore dropped by almost 10 per cent to €0.88 while Uniq shares rose 22.97 per cent to 94.07p.
MEET THE ADVISERS
GREENCORE has hired Barclays Capital to act as financial adviser, joint broker and joint sponsor, with Mark Todd and Jon Bathard-Smith leading the team.
The bank has worked with the Irish food company over the past year during its unsuccessful attempt to merge with Northern Foods, which went to the tycoon Ranjit Singh Boparan.
Mark Todd, managing director of BarCap, joined the investment bank from Citigroup’s mergers and acquisitions team in July 2009. The Queens College, Cambridge graduate has worked with Imperial Tobacco during its acquisition of Altadis, Tata Motors as it bought Jaguar, as well as buying and later selling Somerfield during his ten years at Citi. He is joined by Jon Bathard-Smith, from Barclays Capital’s Corporate Broking division.
The advisory firm Spayne Lindsay is leading the sale on behalf Uniq’s majority shareholders, Angel Street.
Investec is also an adviser to Uniq.