Tayto could fetch price of over £100m

After months of speculation, Irish manufacturer of crisps and snack foods Tayto has been put up for sale by US owner TLC Beatrice. Industry sources suggest Tayto could fetch a price of well over £100 million (€127 million).

Beatrice said yesterday it has sold its ice cream business in Spain and plans to sell its remaining assets, including Tayto, and then liquidate. It said it had already received offers for Tayto and while not divulging who had indicated an interest, it is thought that Cantrell & Cochrane and the Pepisco offshoot, Walkers Crisps are among the bidders, while IAWS has also been mentioned as a possible, but less likely bidder. It is understood at least one large venture capital fund may also consider bidding.

Cantrell & Cochrane, which was the subject of a £580 million management buyout last year, has made no secret of its wish to buy Tayto as a move to diversify its drinks business into a broader-based food and drink company. C&C's main backer, British venture capital group BC Partners, has also made it clear it would support the Irish group in expansion through acquisition.

Pepisco's snack foods arm in Europe, Walkers Crisps, is the major player in the British crisps and snack foods market and also has extensive interests in Europe. So far, however, Walkers Crisps has not challenged Tayto's dominance of the Irish market and would probably see Tayto as the perfect opportunity to buy the dominant brand in the Irish market and also as a company that has an enviable profits record.

Beatrice has not disclosed Tayto's recent financial results but the snack foods group is thought to have had sales last year of over £40 million, with profits of over £10 million. On last year's trading, Beatrice said that Tayto performed well - "turning in results which were ahead of the prior year in local currency terms". Sales grew, although higher potato costs meant operating income dipped slightly.

"For 1998, Tayto increased sales by 7 per cent in local currency terms, helped by the strong showing of a new low-fat potato chip and higher sales of potato chips in general," Tayto said last March.

One of the group's main assets is its eponymous Tayto brand, the most popular snack foods brand in the State and one which allows Tayto to trade on near 25 per cent operating margins.

But there are suggestions a buyer like Walkers might be more interested in the Tayto brand rather than in its manufacturing plant in north Dublin, which industry sources say is in need of substantial capital investment. This may raise fears about the future of at least some of the jobs at the Coolock plant These sources say that Beatrice has been reluctant to invest any substantial sums in the Tayto plant in recent years, in the knowledge that it planned to sell the firm. Most of the investment has gone into marketing, illustrated by the current high profile "devil" campaign for Tayto crisps.