Kerry Group's hand in the race for Unilever's Birds Eye brand has been strengthened by the collapse of a consortium considered the favourite in the auction.
With final bids in the €1.46 billion sell-off due to be lodged within days to investment bank Goldman Sachs, private equity fund CapVest was hit last week by the withdrawal of its financial backers CVC Partners and Kohlberg Kravis Roberts.
The would-be chief executive of the consortium - Martin Glenn, the former head of PepsiCo in Britain - is also reported to have withdrawn.
These withdrawals dealt a severe blow to CapVest and seriously undermine its capacity to mount a winning bid.
Other private equity groups such as Permira and Cinven have been mentioned as bidders but the defections from the CapVest consortium are considered by some observers to hand the initiative to Kerry Group.
The food group's chief spokesman declined yesterday to make any comment on the process.
While he would not even confirm or deny Kerry's interest, the group is said elsewhere to have lined up support from Blackstone and JP Morgan Partners for a three-way bid.
As owner of the Young's Bluecrest and Findus, CapVest was considered early in the race to be a strong favourite for Birds Eye, which is on the market following a strategic decision by consumer goods group Unilever to sell most of its underperforming frozen food business.
But reports suggest the group's backers were concerned that the integration of the Birds Eye brand into a giant frozen food company would trigger a full inquiry by the EU competition body. Were CapVest to prevail, it would have a controlling stake in major part of the European frozen fish market.
Kerry Group spent €183 million last year on acquisition of Noon Group, the London-based ready-meals company.
With consumers spurning frozen food brands for chilled food and ready-meals, Unilever's decision to sell Birds Eye followed a 4.5 per cent drop in frozen food sales. The multinational is retaining an Italian frozen food business and its ice cream brands, including HB and Ben & Jerry's.
Shares in Kerry Group plunged by 10 per cent in May after a warning at its annual general meeting that it might not meet profit forecasts for the year. The stock, which traded at €19.47 before the warning, finished seven cent weaker yesterday at €16.81.
