Golden Vale has pulled out of its planned £130 million (€165 million) takeover of the British group Prize Foods. The recent volatility in financial markets and the weakness of the euro against sterling are among the reasons for the withdrawal.

Prize Foods would have been Golden Vale's biggest takeover and the debt involved in financing such a deal would have put pressure on Golden Vale's balance sheet, reducing its interest cover from eight times to three times. Market sources said, however, that concerns over the state of the British food industry and the squeeze on margins by multiples were other factors in the decision to abandon the deal.

Golden Vale chief executive Mr Jim Murphy said that Golden Vale had decided that it would not be prudent to go ahead with an acquisition of this scale given the volatility of financial markets and the weakness of the euro.

Meanwhile, industry sources have indicated that Greencore's hopes of acquiring the British ready-meals group Hazlewood have been dashed, with Hazlewood to be sold for £275 million sterling (€457 million) to the French private equity firm Paribas Affaires Industrielle. The failure to buy Hazlewood has led to speculation that Greencore may switch its attention back to Perkins Foods, the ready-meals group for which it made a £190 million sterling bid, later withdrawn, last year.