US buyout firm Hicks, Muse, Tate & Furst said yesterday it would raise its offer for British foods-to-furniture group Hillsdown Holdings to trump a rival £816 million pound management buyout bid.
A Hicks, Muse investment vehicle said it now controlled some 26.9 per cent of Hillsdown after buying shares in the market at a price of up to 146p each. It said it planned to increase its cash offer to at least that level.
That would just beat a 145p per share cash bid from a management group backed by UK venture capital firm Candover Investments. The management deal, unveiled on Friday, valued Hillsdown at £816 million including debt.
Hicks, Muse made an initial 127 pence per share offer last month which it said it had been planning to raise to 141p pence per share.
The MBO team, led by Hillsdown chief executive Mr Michael Teacher, claimed the blessing of the company's non-executive directors including chairman Mr Peter Jacobs.
However, sources close to Hicks, Muse noted that the MBO bid needed 75 per cent support to go through. That means Hicks, Furst has a large enough stake to block it
Hillsdown shares gained 1/2p to 146-1/2p on Tuesday, having doubled in value over the past few weeks as the bid battle hotted up.
Analysts said the latest Hicks, Muse offer - expected to be confirmed on Wednesday - may prove decisive. The key would be whether Candover was prepared to back the management at a higher price.
Hillsdown, maker of Typhoo tea, Hartley's jams and branded foods for Britain's supermarket chains, said it had no comment to make pending formal notification of the new Hicks, Muse bid.
A £1.6 billion bid from food group Unigate was aborted last year over worries about Hillsdown's poultry business.
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