Largo in leading position to buy Tayto

Largo Foods, the snack food manufacturer, is understood to be in a leading position to purchase Tayto in a deal worth €50-€60 million.

British merchant bank Close Brothers is also believed to have made a recent bid, but Largo is now regarded as the favourite to complete the acquisition, possibly as early as next week.Another interested company Jacob Fruitfield is not expecting to be successful at this stage.

An official announcement by the sellers of Tayto, C&C, is expected to be made next week to the Irish Stock Exchange. The sale of the company is being handled by IBI Corporate Finance. C&C yesterday refused to comment.

Tayto is one of Ireland's most iconic brands, but it has been under pressure in recent years from overseas brands like Walkers. Profits at Tayto, formerly owned by American-based Beatrice Foods, have been falling and recently slipped to €7 million.

Largo Foods, headed by managing director Raymond Coyle, is one of the largest Irish-owned snack food manufacturers in the country. It recently won the contract to manufacture Tayto crisps at its plants in Meath and Donegal.

Largo Foods is already home to several well-known crisp brands such as Hunky Dorys and Perri. If it does acquire Tayto it may face some competition issues.

The Tayto sale process has taken several months. Earlier, Tayto Northern Ireland dropped out of the race. It is a separate company from Tayto in the south. Tayto Northern Ireland bought Golden Wonder in February for €22 million.

It is believed that Largo was among the companies that lost out on that occasion.

Analysts have generally been supportive of C&C's disposal of Tayto on the basis that it should allow Maurice Pratt, the chief executive, and his team to concentrate on growing their other brands like Bulmers, Magners, Tullamore Dew and Carolan's.