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Insider: 2 Sisters to target Bakkavör next

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Insider: 2 Sisters to target Bakkavör next

June 21
10:02 2013

Financial representatives are attempting to forge a sale of some or all of chilled food firm Bakkavör’s UK facilities to 2 Sisters Food Group, according to a source within 2 Sisters.

FoodManufacture.co.uk understands that no direct approach has been made by either company and that Bakkavör itself is averse to any deals at this stage.

However, the 2 Sisters source told FoodManufacture.co.uk that company founder, owner and ceo Ranjit Boparan “would love to get his hands on Bakkavör”. The source said: “There have been intermediaries in the City trying to form a deal.”

Any sale was unlikely to happen within the next two years, while 2 Sisters worked on improving the fortunes of Vion’s UK red meat and poultry business, the source said.

‘Vion … complicated the timing’

“The Vion deal has complicated the timing as Vion is losing a lot of money. Once it starts making money in a year or two, Bakkavör will be the next target.”

Authorities only cleared 2 Sisters’ acquisition of most of Vion’s UK operations this week, three months after this deal was officially announced in March.

2 Sisters bought Northern Foods in 2011 and that, plus its takeover of the Vion UK sites, could have left it light on capital, which might hamper Boparan’s designs on Bakkavör.

However, the 2 Sisters insider said Boparan was so keen to secure Bakkavör assets that he might consider selling off something to finance it. And he is known to be highly acquisitive, with ambitious plans to grow 2 Sisters, as the purchases of Northern Foods and the Vion facilities attest.

According to Bakkavör’s website, 83% of its group sales come from the UK, where it has 32 facilities. The rest of its business is generated outside the UK, where it has 22 facilities. It has operations in Europe, Asia and North America and its UK head office is in Spalding, Lincolnshire.

‘Rumour and speculation’

Responding to claims that discussions had taken place to broker a sell-off of Bakkavör assets to 2 Sisters, a spokesman for the business told FoodManufacture.co.uk: “It’s our policy not to comment on rumour and speculation.”

A Bakkavör spokesman similarly responded: “We don’t comment on market speculation.”

The development comes just a week after a report in The Sunday Times claimed that 2 Sisters was in talks to acquire
turkey farmer and supplier Bernard Matthews. Again, 2 Sisters refused to comment.

Bernard Matthews simply stated it was “exploring a range of options” with professional services firm PWC “to accelerate the company’s existing growth strategy and infrastructure developments”.

In May last year, Shore Capital analyst Darren Shirley told FoodManufacture.co.uk that Bakkavör was a likely takeover target: “It was not unreasonable to assert that Bakkavör might feature in industry reorganisation.”

And in April this year, Bakkavör sold its produce businesses in France and Spain for £28.1M to the leading European food co-operative Société Cooperative Agricole et Agro-alimentaire Agrial.

 

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