Agri-Business group IAWS has lodged a bid for the four Spillers flour mills in Britain being sold by the British group Tomkins and is also considering a joint bid for Irish Fertilizers Industries (IFI) with an international fertiliser group.
Analysts believe a successful bidder will have to pay between £50 million (€72.8 million) and £60 million sterling (€87.4 million) for the four mills and Tomkins has already indicated that it expects to take a £40 million sterling (€58.3 million) loss on the £92 million sterling (€134 million) it paid to Kerry Group last year for the six Spillers mills. Greencore is another bidder for the Spillers assets, although it is understood that Greencore is only interested in one of the mills.
Speaking after the IAWS annual general meeting in Dublin yesterday, chief executive Mr Philip Lynch said the group was in negotiations with Tomkins but added: "I don't know what the outcome will be."
He said that, to comply with the Office of Fair Trade instruction to sell the four mills at Avonmouth, Tilbury, Liverpool and Newcastle, Tomkins would at least have to have sight of an agreement by the March 31st deadline.
"We decided to bid for all four mills and would even have liked to have bid for the six Spillers mills [only four mills are affected by the OFT order]. It makes sense to buy them in a block. There would be no sense in us buying individual mills in terms of market share," he said. He added that the four Spillers mills made up about 15 per cent of the British flour market.
On the plans for a new state-of-the-art flour mill in Dublin's dockland, Mr Lynch said planning permission had been received and quotations for the construction of the facility had been sought. He added that this mill would cost IAWS in the order of £15 million-£20 million (€19E25.4 million), but that this would be well covered by the cash generated from recent property sales in the Grand Canal Basin area south of the river.
On IFI, Mr Lynch indicated that IAWS expected to receive a detailed prospectus on the sale from the Investment Bank of Ireland within the next two weeks but added that IAWS was unlikely to make a solo bid.
"There might be a good case for us to buy with another player, one of the majors in the fertiliser business." IAWS had received "overtures" from prospective bid partners, he added. He declined to reveal who had approached IAWS about a joint bid for IFI, but industry sources have already suggested that Kemira of Finland, Norsk Hydro from Norway and the US group Terra are interested parties.
