GREENCORE HAS held discussions with a number of major food companies, understood to have included Nestlé, about reformulating a bid for Northern Foods.
It is believed talks with the Swiss food giant ended without agreement last week.
The company yesterday posted a stock exchange announcement saying it was still considering its options in relation to Northern Foods.
It is believed Greencore is increasingly focusing its efforts on recruiting a partner as it considers the possibility of mounting a revised offer for Northern.
The Irish-listed company – which announced details of an all-share merger with Northern Foods in November – will have to trump a 73 pence all-cash offer by British chicken processor Ranjit Boparan.
The board of Northern Foods withdrew its support for the proposed merger with Greencore following the last-minute counter-bid by Boparan. It is now backing Boparan’s offer.
Greencore has already indicated to the market its awareness of the importance of a cash element to the bid.
However, it is believed the prospect of a revised Greencore offer now hinges on its ability to attract a merger partner, rather than attempting to finance the deal itself through debt or a rights issue.
Any joint bid, which would almost certainly contain a significant cash element, could involve the splitting up of Northern Foods, one of Britain’s largest food companies. As well as its chilled foods division, the company has a number of branded businesses including Fox’s Biscuits and Goodfella’s Pizzas, which could be hived off.
However, analysts believe that the short timescale involved may render Greencore’s efforts to secure a partner virtually impossible.
Greencore has until the end of March to make a revised offer for Northern Foods. However, this deadline is likely to be superseded by other events.
Northern Foods shareholders have two weeks from today to accept Boparan’s offer, though this deadline is likely to be extended by the Takeover Panel if the 75 per cent threshold is not reached.
Northern Foods shares have been trading at around 75 pence since Boparan’s 73 pence offer, indicating the market may be expecting a counter-bid.
While Boparan could increase its stake to over 25 per cent, giving it blocking rights to any alternative proposal, the fact that Northern Foods has been trading at a level higher than Boparan’s offer price effectively prohibits Boparan from doing so as it would then have to make an offer for the entire company at the higher share price.
Northern Foods employs over 9,000 people at sites across Britain and Ireland. Its Goodfella’s pizza brand is produced by Irish subsidiary Green Isle, which it acquired in 2005.
