Boparan launches rival bid for Northern Foods
Ranjit Boparan – the West Midlands chicken tycoon behind the 2 Sisters Food Group – has launched a £300m hostile bid for Northern Foods.
Boparan, who is one of Tesco's biggest chicken suppliers, has hired NM Rothschild to help him scupper the merger that is due to create a enlarged group renamed Essenta with annual sales of £1.7bn.
Boparan has been building up a stake in the owner of brands including Goodfella's pizza and Fox's Biscuits over the past three months. The shareholding, which now stands at 6.6%, has been acquired through his wholly-owned company Saerimmer Limited.
Northern Foods confirmed this morning it had received a letter from Boparan on Dec 17 requesting access to certain information, but said the board is still recommending the Greencore deal to shareholders.
"The board of Northern continues to believe that the proposed merger with Greencore Group to form Essenta Foods offers substantial benefits for its shareholders,” the company said.
Boparan and his advisers have asked for access to confidential files prepared for Greencore to complete its own due diligence ahead of the merger. Under takeover rules, "bona fide" bidders must be given equal access to financial information in an offer period.
Boparan Holdings told the market via a statement: “Boparan Holdings notes the press speculation and the announcements by Northern Foods and Greencore Group plc today relating to a possible offer for Northern Foods by Boparan.
“Boparan confirms that it is at a preliminary stage in evaluating a possible cash offer for Northern Foods and has requested information under Rule 20.2 of the Takeover Code.
“However, there can be no certainty at this stage as to whether this will result in an offer being made for Northern Foods. Further announcements will be made as and when appropriate. “
Hedge fund millionaire Crispin Odey, a long-time shareholder in Northern, has also increased his stake to 5.3%.
Self-made millionaire Boparan founded his company from behind a butcher's counter.
He paid himself and his wife Baljinder a £12m dividend for the year ending August 2009, outstripping the previous year's £11m payout and boosting the fortune of the Boparans to an estimated £130m. The latest set of accounts for his 2 Sisters Food Group, show that sales for the same year increased to £579m from £508m, while profits were up 33pc to £33.9m.