Greencore and Kerry are being tipped as front runners to win the bid for Dalgety's food ingredients business. The deal, which is expected to be worth more than £300 million sterling (£345 million), is due to be signed in the next few days, according to today's Financial Times.

Advisers to Dalgety said there had been strong interest in the business and a "spunky price" would be achieved. The likelihood is that the ingredients and flour-milling activities will be sold as one business, which would favour the Irish bidders.

There is also a research and development facility in Cambridge which had unexpectedly been the subject of a separate offer.

Kerry already has an extensive food ingredients business in North and Central America, as well as Europe. The Dalgety deal offers Kerry the opportunity to get a foothold in the lucrative UK market, where it has little geographical presence.

Until recently industry observers believed that Greencore would be more likely to target the Paul's Malt business being sold off by Harrisons & Crosfield.

Dalgety, whose other interests include pet foods and agricultural supplies, put the food ingredients division up for sale last September. The plan was to announce a sale with interim results due next month, but a deal is now expected sooner.

The combined Dalgety ingredients and flour milling businesses had sales of £359 million sterling last year and operating profits of £29.9 million sterling. The ingredients business is understood to have had sales of around £185 million sterling and operating profits of £17 million sterling. The flour business had sales of £175 million sterling and operating profits of around £13 million.

Dalgety has also put Martin Brower, a US subsidiary which is a dedicated distributor for McDonald's, up for sale. This has also attracted a number of offers and is expected to raise about £50 million sterling.

Some £200 million sterling of the proceeds of the two sales is to be returned to shareholders, perhaps through a share buy-back. The shares closed unchanged at 278p yesterday.

In September, Mr Richard Clothier resigned as chief executive, and Mr Ken Hanna, who had recently joined the group as finance director, was appointed chief executive.

The group had been affected by the BSE crisis and the decline in farmers' incomes. However, it had also failed to improve margins in its pet food subsidiary after it bought Quaker Oats' pet food business for £440 million sterling in 1995.