Premier Foods has today responded to speculation about a bid by the Swiss consumer goods giant Nestlé to buy its meat-free range, Quorn.
Nestlé is said to have submitted an offer for Quorn via it its subsidiary Osem Group, the majority-owned Israel-based Nestlé venture that specialises in ethnic foods.
In a statement released today, Premier Foods said: "Premier Foods notes the recent press speculation regarding its Meat-free business. 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 statement continued: “The Group announced on 3 October that it had received approaches for its Meat-free business, including Quorn. Premier Foods confirms that it has received bids from a number of parties, including multinational food groups and private equity firms.
“Discussions are proceeding and are at an advanced stage with two parties. There can be no guarantee that a sale of its Meat-free business will take place. Further announcements will be made as and when appropriate.”
It is thought that Quorn could be sold for as much as £230 million, a price that would help to reduce Premier’s debt of £1.6 billion, much of which was acquired when it bought RHM and Campbell Soups' UK and Irish business in 2006.
It would also help to alleviate some pressure from hostile investors after Premier’s shares lost more than 90 per cent of their value in the past three years.
Premier acquired the Quorn brand when it bought Marlow Foods from Montagu Private Equity for £172 million in 2005.
Based in St Albans, England, Premier had sales of £131 million from meat-free products in 2009. The company employs 16,000 people, with 99.4 per cent of UK households buying a Premier brand last year—brands which include Hovis, Ambrosia, Loyd Grossman, Bisto, Homepride and Fray Bentos. The company is the UK’s largest food producer.
Nestlé, which owns brands such as KitKat, Shredded Wheat and Carnation condensed milk, has so far declined to comment on the negotiations.
