Greencore shares recover following news of planned US exit
Company said the $1.1bn sale to rival Hearthside would deliver ‘real value’
Greencore chief executive Patrick Coveney insisted the company’s decision was not taken under duress.
Shares in sandwich-maker Greencore rebounded on Tuesday after falling 9 per cent on Monday following the company’s surprise decision to sell out of the US market.
Greencore chief executive Patrick Coveney insisted the company’s decision was not taken under duress. He said the $1.1 billion sale to rival Hearthside would deliver “real value” for shareholders. Shares were up almost 6 per cent at the close of the market on Tuesday.
The food group’s London-listed shares recovered 5.8 per cent of their value on Tuesday to close on 200 pence sterling.
Greencore’s sudden U-turn came just months after Mr Coveney himself took charge of the US business, pledging to turn it around.
The move came just two years after Greencore spent $748 million buying Illinois-based Peacock Foods in a bid to quadruple its US sales and cement its position in the fast-growing US food retail sector.
The company, which sells sandwiches, salads and sushi to customers including Starbucks and 7-Eleven in the US, had spent $979 million in capital growing the US business.
Part of the proceeds from the sale, which still requires shareholder approval, will go back to shareholders in the form of a special €509 million dividend.