Greencore has announced it does not intend to make a revised offer for Northern Foods, following an announcement last week that it was still considering its options.
In November 2010, food manufacturers Greencore and Northern Foods agreed on the terms of a recommended merger, which would have seen the creation of one of the largest convenience food businesses in the UK and Ireland.
However a counter bid by Boparan Holdings was subsequently backed by the board at Northern Foods over the Greencore deal.
In January the boards of BH Acquisitions (a wholly-owned subsidiary of Boparan Holdings Limited) and Northern Foods announced that they had reached agreement on the terms of a unanimously recommended cash offer of 73 pence per Northern Foods share, to acquire the entire issued, and to be issued, ordinary share capital of Northern Foods.
Greencore said that, over the past few weeks, it had been working with a partner in order to agree a simultaneous sale of certain Northern Foods branded businesses, which was intended to provide funding and allow Greencore to acquire only the parts of the Northern Foods business with the greatest synergy potential.
“This relatively complex structure required a range of stakeholders to reach agreement,” explained Greencore. “However, after substantial investigation, the board has determined that an improved offer could not be concluded on terms which would deliver sufficiently strong returns to Greencore shareholders.”
As of 2 March, Boparan had received valid acceptances from Northern Foods’ shareholders in respect of 107,933,805 Northern Foods shares, which represents approximately 23.03% of the existing issued ordinary share capital of the firm.