Boparan gets 34% backing for Northern Foods offer

RAANJIT BOPARAN has received the support of more than 34 per cent of Northern Food shareholders for his 73 pence a share offer for the company, throwing the possibility of a revised offer by Greencore further into doubt.

Mr Boparan was required to disclose the level of shareholder acceptance for his offer yesterday. Because Greencore has yet to make its intentions clear regarding any revised offer for Northern Foods, analysts had expected that most shareholders would delay accepting Boparan’s offer in the hope that Greencore might return with a better one.

While the 34 per cent support includes Mr Boparan’s own 11.4 per cent shareholding in the company, the level of shareholder acceptance was higher than some commentators had anticipated.

Mr Boparan needs 75 per cent of shareholders to accept his offer and has set a fresh deadline of March 16th by which shareholders must respond.

However, all eyes will be on Northern Foods’ share price today – if the share price falls below the 73 pence level, Mr Boparan may increase his shareholdings in the company. A 25 per cent stake in the company would give Mr Boparan rights to block any rival deal.

The Northern Foods share price has been gradually dropping in recent days, signalling that the market believes that Greencore is less likely to mount a counter-offer for the company.

Some 90 per cent of Northern Foods’ shareholders are institutional investors, with the remainder held privately.

Last November, Greencore and Northern Foods announced an all-share merger plan. However, this was scuppered in January when Mr Boparan, a small shareholder in Northern Foods, made a 73 pence a share offer for Northern, which won the support of the board.

Greencore has held discussions with third parties, including Nestlé, about reformulating a revised offer for the company. No revised offer has yet been made.