GREENCORE IS to press ahead with its scheduled agm next Monday as speculation mounts as to whether the Irish food company will submit a revised offer to Northern Foods.
Greencore’s share price fell by more than 5 per cent yesterday. This followed Northern Foods’ withdrawal of support for the Greencore merger late on Friday after a rival cash offer was received from businessman Ranjit Boparan.
Greencore said it was “considering its options” following the cash offer by BH Acquisitions for Northern Foods. The company, which is controlled by chilled food magnate Ranjit Boparan, announced a £342 million (€400 million) bid for Northern Foods which was endorsed by the board of the merger target.
Greencore’s assertion in its statement that it “recognises the importance attached by the Northern Foods board to the certainty of cash value in their decision to change their recommendation” sparked speculation that the company may submit a revised offer which would have a cash component.
Barclays Capital is advising Greencore on the merger.
Mr Boparan has 28 days to send the offer document to Northern Foods shareholders. From this point, Mr Boparan potentially could close the deal within 21 days if he achieves 75 per cent shareholder support.
The timing of any revised offer from Greencore is likely to take into account the Irish firm’s agm. Northern Foods is also proceeding with its scheduled egm on Monday, at which shareholders will vote on the proposed merger with Greencore which the board of Northern Foods no longer supports.
Northern Foods’ share price climbed to the highest point in two months since the announcement on Friday, although some analysts pointed out that it could indicate that the market is pricing in the possibility of a further bid.
“There is a belief that Greencore could stretch to 30p,” one London-based analyst said. “This would mean the offer would comprise roughly 40 per cent in cash and 60 per cent in Greencore shares.”
In a market update Greencore gave further details on the £40 million cost savings it would make as part of the proposed merger.
This comprises £15 million in overhead-costs savings, £20 million from purchasing and supply chain improvements, and £5 million through financing and tax efficiencies, the Irish food company said.
