Greencore is mystery suitor for Perkins

Greencore has confirmed it is the mystery company in potential takeover talks with Britain's Perkins Foods.

The agri-food group said yesterday it had made an approach to Perkins before Christmas and preliminary discussions were under way "which may or may not lead to an offer being made" for the British private-label chilled and frozen foods company.

A report in yesterday's Financial Times suggested Greencore had made an offer of 150p sterling per share for Perkins, which would value it at nearly £187 million sterling (€303 million).

However, after hearing that Perkins had previously been in talks with a venture capital consortium about a potential management buyout offer of 140p a share, Greencore cut its bid to the same price, it was reported.

Greencore declined to comment on the talks except to say a further announcement would be made in "due course".

Shares in Perkins group surged to a record high of 142p sterling the day before Christmas after Perkins said it had received an approach from a potential trade buyer.

The group's main activity is the manufacture and distribution of fresh and frozen foods, from sausages and burgers to frozen pizzas and pastry products. Perkins, which has production centres in Stoke-on-Trent, Staffordshire, and in Shap and Penrith, Cumbria, is expected to report pre-tax profits of between £23 and £26 million sterling for 1999.

Greencore continues to generate strong cash-flow but needs to expand if it is to start registering on the radar screens of many international institutional investors. Analysts believe that Perkins would be a good fit.

"Strategically it would be a good opportunity for them," said Mr Paul Meade, food analyst with NCB Stockbrokers. He noted that Greencore was already operating in the own-label chilled foods business, through companies like Paramount and Meridian Foods, both of which had performed exceptionally well for the group.

"It is a good sector to be developing into and an area in which they have a lot of expertise," he said.

In addition to the double digit growth enjoyed by many of Perkins' businesses, its significant European presence would be an added attraction for Greencore.

On the London Stock Exchange, Perkins shares closed unchanged at 125p yesterday. In Dublin, Greencore was down 10 cents at €2.85.