Thai food giant mulls £2.5bn Birds Eye offer
A THAI food firm has emerged as the latest suitor in the £2.5bn battle for the frozen foods group behind Birds Eye.
Charoen Pokphand Foods, Thailand’s largest agribusiness firm, is preparing a bid for Iglo, which has been put up for sale by buyout firm Permira.
The first deadline for bids was on Thursday when offers came in from Bain Capital, BC Partners, Blackstone and PAI Partners, bankers said.
Clayton Dubilier & Rice, the US firm which counts Sir Terry Leahy as an adviser, was also thought to have submitted one, while Iglo has also attracted interest from trade buyers.
CP Foods is part of the Charoen Pokphand Group conglomerate, which has interests ranging from retail to plastics and property.
Last week CP Foods said it is looking at several acquisitions and it is likely to clinch one or two deals in food processing this year.
It is likely to be interested in Iglo because of the major growth opportunities in East Asia, where poultry, fish and vegetables – the core products made by Iglo – feature heavily in the diet of most people.
Any deal would add to the number of British food names being taken into Asian ownership. Earlier this month China’s state-owned Bright Foods bought a 60 per cent stake in Weetabix in a £1.2bn deal.
Iglo, which has nearly 2,500 staff, operates in 11 countries and trades as Birds Eye in Britain and Ireland.
It is likely to fetch eight to nine times its €325.8m earnings before interest, taxation, depreciation and amortisation, which would make it the largest western European buyout since industrial group Tomkins’ £2.9bn acquisition in July 2010 by a Canadian consortium.
Permira has looked to exit Iglo and decided it would fetch more through a sale than a float. It is being advised by William Mansfield of Credit Suisse.
Second round bids for Europe’s largest frozen food group are expected in June, banking sources added.
Permira bought Iglo from Unilever in 2006 for €1.73bn, backed by around €1.5bn of leveraged loans, and later bought the remaining part of Unilever’s European frozen food business, Findus Italy, in 2010 for €805m, backed by €500m of leveraged loans.
Debt has since been reduced to €1.4bn as of the end of 2011, the company said.
A spokesman for Iglo declined to comment and Permira and CP Foods could not be reached.