Greencore rejoins fight for Northern

Marion Dakers
SHARES in Northern Foods rose 17.5 per cent yesterday following potential partner Greencore’s pledge to improve its merger offer.

Greencore yesterday responded to Ranjit Boparan’s takeover bid for Northern by acknowledging “the importance attached…to the certainty of cash value” in the counter offer and promising to consider its own options.

It is understood that Greencore is looking at adding a cash sweetener to its all-share merger plan.

Chicken magnate Ranjit Boparan, who also owns the Harry Ramsden fish shop chain, on Friday made a 73p per share cash bid, valuing the Leeds-based maker of Goodfella’s pizza and Fox’s biscuits at about £342m.

The board at Northern dropped their support for the merger with Greencore, first announced in November, and recommended the bid from Boparan’s BH Holdings.

Northern’s shares closed at 74p yesterday, slightly above Boparan’s offer price.

The planned merger with Greencore valued Northern shares at just over 48p, though Greencore yesterday stressed the annual cost synergies of £40m from sharing operations and basing the enlarged company in Ireland.

Warren Ackerman at Evolution Securities said the Boparan bid offers shareholders the certainty of a cash exit, although the merger with Greencore offers more logical synergies.

“If Greencore were to add 25p-plus cash to the existing merger terms, we thing the offer should be seriously considered by shareholders,” said Ackerman in a note to shareholders.