IER Foods has confirmed it is in advanced talks with bidders for its Quorn meat-free business today, in an answer to speculation about a sale.
In a statement Premier, maker of Hovis bread and Branston pickle, said it was open minded about selling the business and confirmed it had received bids from a number of parties including private equity firms and “multinational food groups.”
The announcement is a response to reports that Nestle has approached it to buy the division, although Premier would not confirm this and the statement added that “there can be no guarantee” of a sale.
Any deal would have to deliver shareholder value and speed up the reduction of Premier’s net debt to EBITDA ratio, it said, as it continues to struggle to reduce its debt pile.
Net debt stood at £1.37bn at the end of June. In October, the company paid £167m to exit a series of interest rate hedging derivatives.
Shore Capital analysts described Premier as “pension burdened and indebted”. “There are a lot of liabilities to cover within Premier, underlying trading profits are going backwards and we still question if there is much or anything in aggregate for equity shareholders,” they said.
Premier’s shares, which had lost 95 per cent of their value by October this year, rose on the news of a bidder for the business, trading at a high of 19.25p today before falling back.