PREMIER Foods confirmed yesterday that it had received an approach for its meat-free brand Quorn.
The UK’s largest food producer, whose brands include Hovis bread, Branston Pickle and Bisto gravy, promised in August to reduce its £1.4bn debt pile by £100m each year.
The FTSE 250-listed group refused to name the suitor or asking price for Quorn yesterday, and said there was no guarantee of a sale at this stage.
“As stated at the time of its interim results on 4 August, the board remains open minded about disposals, provided they deliver shareholder value and accelerate the reduction of average net debt/EBITDA,” the firm said.
Premier has been grappling with a mounting debt pile recently, having closed its costly final salary pension scheme in August with a black hole of around £431m. Chief executive Robert Schofield, who mounted a £400m debt restructuring and cash call in 2009, said after the firm’s latest results the Premier was ready to sell assets.
“It takes us a few years to get to our target of cutting debt organically. Therefore we are open minded about disposals if they accelerate that journey,” he told reporters in August.
Fund managers such as Warburg Pincus, Franklin Templeton and Paulson have taken large stakes in the company since a share placing in March 2009. Analysts including Investec have published notes warning that the new investors will soon demand to see value for money.
Meanwhile, Premier’s new chairman Ronnie Bell, a former boss of Kraft in Europe, takes over from David Kappler today, while ex-ICI boss Charles Miller Smith moves up to become deputy chairman. Smith was put forward to the board by Warburg Pincus in June 2009.