Greencore secures over 95% backing for €521.3m share sale

Food group seeking to sell shares to help finance $747.5 million purchase of Peacock Foods

Patrick Coveney, chief executive, addressing shareholders at the Greencore Group 2016 EGM in Dublin. Photograph: Eric Luke / The Irish Times

Patrick Coveney, chief executive, addressing shareholders at the Greencore Group 2016 EGM in Dublin. Photograph: Eric Luke / The Irish Times

 

Greencore said its plan to raise £439.4 million (€521.3 million) in a share sale to carry out a transformational US acquisition has received valid acceptances for 95.2 per cent of the stock on offer.

The convenience foods group plans to use the proceeds, together with £200 million of new debt, to complete the purchase of US food group Peacock Foods, for $747.5 million (€715.7 million).

Banks and securities firms underwriting the deal, HSBC, Goodbody Stockbrokers, Jefferies and Rabobank, “shall use all reasonable endeavours to procure, no later than 4.30pm on 22 December 2016, subscribers for all the remaining 13.4 million new Greencore shares not validly accepted,” Greencore said on Wednesday evening.

The move into the US is a market strategic initiative by Greencore. The Illinois-based convenience food company generated about $1 billion in sales and adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of $72.1 million in the year to September, it announced last month.

The deal is expected to more than quadruple Greencore’s total sales in the US.