Greencore may face rival bid

The proposed merger between Greencore and Northern Foods has been thrown into question, following confirmation by Northern Foods that it has received an approach from Boparan Holdings Limited.

Acknowledging the request for information by Boparan, Northern Foods reiterated its support for the Greencore merger, which would create Essenta Foods.

Boparan, an investment vehicle for British chilled-food manufacturer Ranjit Singh Boparan, has a 6.6 per cent stake in Northern Foods.

Mr Boparan is the owner of the 2 Sisters Food Group, a supplier of chicken and prepared chicken products to retailers including Marks Spencer and Tesco. He is also behind the Harry Ramsden chip shop business.

Mr Boparan had been building his stake in Northern Foods since the announcement of the proposed Greencore merger from less than 3 per cent to 6.6 per cent.

In a statement to the Irish Stock Exchange this morning, Greencore said that the company "notes" the announcement, but that the board of Greencore continues to believe that the merger announced on November 17th 2010 "represents a compelling opportunity for value creation for both Greencore and Northern Foods shareholders, through the creation of a business with real scale in the industry and substantial synergies".

According to British media reports, Mr Boparan is mounting a £300 million bid for Northern Foods.

This morning Northern Foods share price jumped 7 per cent to 65p. Having dropped by more than 10 per cent this morning in Dublin, Greencore's shares were trading just over 4 per cent lower at 10.15 am at €1.275.